VAT guides and news
Plain explanations of the VAT rules that catch small businesses out, and dated news when something changes. Every figure comes from the same checked rules file as our calculators.
Guide ·
VAT penalties for late returns and late payment
Paying VAT late costs nothing for 15 days, then 3% of what is unpaid, 3% more at day 30 and 10% a year after that. Interest runs from the day after the deadline. A late return earns a penalty point, and a £200 fine once you reach the threshold.
News ·
Bank Rate held at 3.75%: HMRC interest on late VAT stays at 7.75%
The Bank of England held Bank Rate at 3.75% on 17 September 2026, so HMRC late payment interest on VAT stays at 7.75%. Repayment interest stays at 2.75%. On £10,000 of VAT paid 30 days late, the interest is £63.70.
News ·
How to check a VAT number, UK or EU
A UK VAT number is GB followed by 9 digits. You can check it free with HMRC's "Check a UK VAT number" service on gov.uk. Check EU numbers on the European Commission's VIES service. Do it before you pay a new supplier.
News ·
Ireland, Austria and Latvia cut VAT on food from July 2026
Ireland cut VAT on food from 13.5% to 9% on 1 July 2026, and Austria and Latvia cut theirs the same day. Austria added a 4.9% rate for basic foods, and Latvia cut bread, milk, poultry and eggs from 21% to 12%. UK consumer sellers must update their rates.
News ·
UK e-invoicing from April 2029: what is known so far
UK business-to-business and business-to-government invoices will have to be e-invoices from April 2029, the government announced on 26 November 2025. It is not yet law and the technical detail has not been published, so no business has to do anything yet.
News ·
Fuel scale charges 2026/27: a 140g/km car now costs £294 a quarter
HMRC's 2026/27 road fuel scale charges apply to VAT periods starting on or after 1 May 2026. A car at 140g/km now carries a quarterly charge of £294, which includes £49.00 of VAT. HMRC published the new tables on 17 April 2026.
News ·
Making Tax Digital for Income Tax has started: how it sits alongside MTD for VAT
Making Tax Digital for Income Tax started on 6 April 2026 for sole traders and landlords with qualifying income over £50,000. MTD for VAT is unchanged, so a VAT-registered sole trader over that figure now has both. The income threshold falls to £30,000 in April 2027.
News ·
Sweden cuts VAT on food from 12% to 6%
Sweden cut its VAT rate on food from 12% to 6% on 1 April 2026, until 31 December 2027. Restaurant and catering services stay at 12% and the standard rate stays at 25%. UK sellers shipping food to Swedish consumers through IOSS must now charge 6% on eligible lines.
News ·
VAT in the 2026/27 tax year: what changed on 1 April and what did not
UK VAT rates stay at 20%, 5% and 0% for the 2026/27 tax year. The £90,000 registration threshold has not moved since 1 April 2024. The changes are smaller: a new relief for donating goods to charity, taxis leaving the margin scheme, and MTD for Income Tax starting.
Guide ·
VAT on fuel: petrol, diesel and home heating
Petrol and diesel are charged VAT at 20%, worked out on the price including fuel duty. At that rate, the VAT inside any pump price is one sixth of it. Domestic heating fuel and home energy are charged at 5%. VAT-registered businesses can reclaim fuel VAT in three ways.
Guide ·
What is VAT and how does it work?
VAT (value added tax) is a tax on spending, charged at 20% on most UK sales. VAT registered businesses add it to their prices and pay HMRC the VAT they charge, minus the VAT they paid on their own costs. The final customer ends up paying the tax.
Guide ·
EU €3 customs duty on low-value parcels
Since 1 July 2026, EU parcels worth up to €150 pay a flat €3 customs duty per item until 1 July 2028. "Per item" means each different tariff line, not each unit. The old €150 duty exemption has ended, and VAT has been due on these parcels since July 2021.
Guide ·
The VAT Flat Rate Scheme
You can join the Flat Rate Scheme if you expect taxable turnover of £150,000 or less in the next 12 months. You then pay HMRC a fixed percentage of your VAT-inclusive turnover instead of working out VAT on every purchase. Spend very little on goods and you pay 16.5%.
Guide ·
UK VAT rates for 2026
The UK standard rate of VAT is 20% and covers most goods and services. Home energy and a few other items are charged at the reduced rate of 5%, and most food, books and children's clothes at 0%. The standard rate has been 20% since 4 January 2011.
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VAT Capital Goods Scheme: how it works and the 2026 changes
From 29 July 2026, the Capital Goods Scheme covers land and buildings costing £600,000 or more, excluding VAT, up from £250,000. Computers are no longer in it. The scheme makes you adjust the VAT you reclaimed on big capital items when your taxable use changes over later years.
Guide ·
The VAT registration threshold for 2026/27
The UK VAT registration threshold is £90,000 of taxable turnover in any rolling 12 months for 2026/27. You must register if you go over it, or if you expect to go over it in the next 30 days alone. It has not changed since 1 April 2024.
Guide ·
VAT on private school fees
Private school fees have been standard rated at 20% VAT since 1 January 2025, for both tuition and boarding. Fees invoiced or paid on or after 29 July 2024 for terms starting in January 2025 or later were caught too. Nursery classes for under-5s stay exempt.
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ViDA: VAT in the Digital Age, for UK businesses
ViDA, the EU's VAT in the Digital Age reform adopted on 11 March 2025, has two main start dates. Platform rules and a wider single VAT registration begin on 1 July 2028. Mandatory e-invoicing and digital reporting for cross-border B2B sales inside the EU follow on 1 July 2030.
Guide ·
EU VAT for UK businesses after Brexit
Goods sent from Great Britain to EU customers are zero-rated exports: no UK VAT, and EU VAT is collected at the border. The exception is consumer parcels up to €150 sold through IOSS. Services follow the customer: reverse charge for businesses, EU VAT for digital sales to consumers.