UK VAT Guide 2026: rates, registration and returns
UK VAT explained: 20%, 5% and 0% rates, the £90,000 threshold, registration for overseas businesses, deadlines and penalties. Updated October 2026.
UK VAT quick facts (2026)
| Item | United Kingdom |
|---|---|
| Standard VAT rate | 20% |
| Reduced VAT rate | 5% |
| Zero rate | 0% |
| Registration threshold | £90,000 for UK businesses; none for overseas businesses |
| VAT number format | GB + 9 digits (e.g. GB123456789) |
| Return frequency | Quarterly (most common); monthly or annual possible |
| Return deadline | 1 calendar month and 7 days after the period ends |
| Tax authority | HM Revenue & Customs (HMRC) |
What are the VAT rates in the UK?
The UK has three VAT rates: a standard rate of 20%, a reduced rate of 5% and a zero rate of 0%. The 20% rate applies to most goods and services.The 5% rate applies to items such as domestic fuel and power, children’s car seats and some energy-saving products. The 0% rate applies to most food, books and newspapers, children’s clothes and passenger transport.Some supplies are exempt from VAT, such as most insurance, financial services, health services and education. Since 1 January 2025, private school fees are taxed at 20%.Who needs to register for VAT in the UK?
A UK business must register once its VAT-taxable turnover goes over £90,000. An overseas business must register as soon as it makes, or expects to make within 30 days, any taxable supply in the UK. The most common triggers for overseas businesses are:- Storing goods in the UK, for example in a fulfilment centre
- Selling goods to UK consumers from stock held in the UK
- Importing goods into the UK and selling them there
- Selling goods worth £135 or less directly to UK consumers without a marketplace, where the seller must charge UK VAT at the point of sale
Is there a VAT registration threshold in the UK?
Yes, for UK businesses, but not for overseas businesses. As of 2026, the threshold for UK-established businesses is £90,000 of taxable turnover over any rolling 12 months, or if you expect to go over £90,000 in the next 30 days alone. The deregistration threshold is £88,000.Businesses with no UK establishment, known as non-established taxable persons (NETPs), have no threshold. They must register from their first taxable sale in the UK.The EU €10,000 distance-selling threshold does not apply to the UK.How do I register for VAT in the UK as an overseas business?
Overseas businesses register with HMRC, usually online through a Government Gateway account. Registration must be completed within 30 days of the first taxable supply, or of expecting to make one.Information typically requested includes:- Certificate of incorporation and company details
- Details and ID of the directors
- Evidence of the UK activity, such as contracts, invoices or a warehouse agreement
- Bank details and expected UK turnover
Not sure whether you need to register in the UK? Book a free VAT Compliance Set-Up Review with TaxDesk and we’ll confirm your obligations. Register for VAT
What does a UK VAT number look like?
A UK VAT registration number has the prefix GB followed by 9 digits, for example GB123456789. Some branch traders have 12 digits. Businesses registered in Northern Ireland that trade goods with the EU also use the prefix XI with the same 9 digits.Since Brexit, GB numbers can no longer be checked on the EU’s VIES system. Use HMRC’s online “Check a UK VAT number” service instead. XI numbers can still be checked on VIES.How often do I need to file VAT returns in the UK?
Most businesses file VAT returns quarterly. HMRC sets your VAT periods when you register. Businesses that usually reclaim more VAT than they pay can ask to file monthly, and smaller businesses can apply for the Annual Accounting Scheme.All VAT-registered businesses must keep digital records and file returns using software compatible with Making Tax Digital (MTD). Paper returns are not accepted.A return must be filed for every period, even if there is no VAT to pay.When are VAT returns and payments due in the UK?
UK VAT returns are due 1 calendar month and 7 days after the end of the VAT period. For example, the return for the quarter ending 31 March is due by 7 May. Payment must reach HMRC by the same date.If you pay by Direct Debit, HMRC collects the payment 3 working days after the deadline.The UK has no EC Sales List since Brexit, except for Northern Ireland businesses that supply goods to the EU.What are the penalties for late VAT filing or payment in the UK?
The UK uses a points-based system for late VAT returns. Each late return earns one penalty point. When a quarterly filer reaches 4 points, HMRC charges a £200 penalty, and another £200 for each further late return.As of April 2025, late payment works like this:| Payment made | Penalty |
|---|---|
| Up to 15 days late | No penalty |
| 16 to 30 days late | 3% of the VAT unpaid at day 15 |
| 31 days or more late | 3% at day 15, plus 3% of the VAT unpaid at day 30, plus a daily penalty at 10% a year |
Can I reclaim VAT in the UK?
Yes. VAT-registered businesses deduct UK VAT on business purchases (input VAT) in their VAT returns, as long as they hold a valid VAT invoice. If input VAT exceeds output VAT, HMRC repays the difference.Overseas businesses that are not VAT-registered in the UK can claim UK VAT back through the Overseas Refund Scheme. Claims cover a period ending 30 June and must be made by 31 December of the same year. Since Brexit, this also applies to EU businesses, which can no longer use the EU refund portal for UK VAT.What is Making Tax Digital for VAT?
Making Tax Digital (MTD) is HMRC’s rule that VAT records must be kept digitally and VAT returns filed through compatible software. It applies to every VAT-registered business, UK or overseas, whatever its turnover.In practice this means:- Keeping VAT records in software or in spreadsheets linked to bridging software
- Sending returns directly from that software to HMRC; manual entry on the HMRC website is no longer possible
- Keeping a digital link between records and the return, with no copy-and-paste steps