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Home Corporate Services How & When to Register for VAT in UK What is the VAT Number?

Get the VAT Number from £89.99

What is the VAT number?

VAT is a tax that's charged on most business transactions in the UK. Businesses add VAT to the price they charge when they provide goods and services to:

  • Business customers; for example a clothing manufacturer adds VAT to the prices they charge a clothes shop;
  • Non-business customers; members of the public or 'consumers' - for example a hairdressing salon includes VAT in the prices they charge members of the public.

If you're a VAT-registered business, in most cases you:

  • Charge VAT on the goods and services you provide;
  • Reclaim the VAT you pay when you buy goods and services for your business.

If you're not VAT-registered then you can't reclaim the VAT you pay when you purchase goods and services. There are different VAT rates, depending on the goods or services that are being provided. Currently there are three rates:

  • Standard rate 20 per cent
  • Reduced rate 5 per cent
  • Zero rate 0 per cent.

The standard rate of VAT is the default rate - this is the rate that's charged on most goods and services in the UK unless they're specifically identified as being reduced or zero-rated. There are some items that aren't covered by VAT. These items are either:

  • Exempt
  • Outside the scope of VAT

There are some things that aren't in the UK VAT system at all - they're outside the scope of VAT. They are not taxable supplies and no VAT is charged on them. Items that are outside the scope of VAT include:

  • Non-business activities like a hobby - for example, you might sell some stamps from your collection
  • Fees that are fixed by law - known as 'statutory fees' - for example the congestion charge or vehicle MoT tests