UK Business Tax

For information only - please contact us if you have a question.

VAT Rates

For information only - please contact us if you have a question.

VAT rates for goods and services

   Most goods and services
Rate% of VAT What the rate applies to
Reduced rate5%Some goods and services, eg children’s car seats and home energy
Zero rate0%Zero-rated goods and services, eg most food and children’s clothes

The standard rate of VAT increased to 20% on 4 January 2011 (from 17.5%).

Corporation Tax rates

Corporation Tax2023/242022/23
General rateN/A19%
Small profits rate (profits <£50,000) 19% N/A
Main rate (profits >£250,000)25%N/A
Marginal relief lower limit
Marginal relief upper limit£250,000N/A
Marginal relief standard fraction3/200N/A
Effective marginal rate26.5%N/A
s.455 tax on loans to participators33.75%33.75%

VAT Threshold

When to register

You must register when you go over the threshold, or know that you will. The threshold is based on your VAT taxable turnover - the total of everything sold that isn’t VAT exempt.

You must register for VAT if your VAT taxable turnover is more than £85,000 (the ‘threshold’) in a 12 month period or you expect to go over the threshold in a single 30 day period.

You’ll also need to register if you only sell goods or services that are exempt from VAT or ‘out of scope’ but you buy goods for more than £85,000 from EU VAT-registered suppliers to use in your business.

You may have to register for VAT if you take over a business that’s already registered.

You must register within 30 days of your business turnover exceeding the threshold. If you register late, you must pay what you owe from when you should have registered. You may get a penalty depending on how much you owe and how late your registration is.

You can register voluntarily if your business turnover is below £85,000. You must pay HMRC any VAT you owe from the date they register you.