VAT Questions and Answers
In this section of the website we answer the most frequently asked questions regarding the UK VAT system. If you have a question you would like answered on this page please feel free to submit it via our contact page.
What is VAT? VAT stands for Value Added Tax and is charged upon purchase of most goods and services in the United Kingdom. The current VAT rate for the UK currently stands at 20% and has been since the 4th January 2011. There have been just 3 changes to the VAT rate since 1991. A global recession prompted a temporary reduction to 15% on the 1st December 2008 which lasted until the 1st January 2010, the VAT rate was then returned to the ever familiar 17.5% however on the 4th January 2011 the rate was raised to 20% following a coalition government emergency budget and has remained there ever since.
Random VAT Facts 1. Hungary residents suffer the worlds highest VAT rates with 27%. Croatia, Denmark, Norway and Sweden all closely follow with a 25% tax on sales. Our United States cousins enjoy much lower sales taxes, between 0-11.75%.2. Donations to charity, MOT testing and National Insurance contributions are all outside the scope of VAT.3. VAT exemption fails include Lucozade, who failed in their quest to be classified as a 'functional food', Innocent trying to pull off their smoothies as a 'liquified fruit salad' and Pringles who insisted that their crisps were not actually made of potato...