VAT for consumers
1. Overview
VAT is a tax you pay on most goods and services. You pay 20% VAT most of the time - but less on essential items.
| Rate | % of VAT | What the rate applies to |
|---|---|---|
| Standard | 20% | Most goods and services |
| Reduced rate | 5% | Some goods and services, eg children’s car seats and some energy-saving materials in the home |
| Zero rate | 0% | Zero-rated goods and services, eg most food and children’s clothes |
Some things are exempt from VAT - eg postage stamps, some financial and property transactions.
How VAT is worked out
When someone charges you VAT they multiply their selling price by the VAT rate to calculate the amount of VAT to charge.
They then add this to the selling price to give you the price you actually pay - this is called the ‘gross’ price.
VAT fraud
If a business doesn’t have a VAT number they’re not registered for VAT and must not charge VAT.
You can check a UK VAT number is valid and report VAT fraud online.
VAT and disabled people
You don't have to pay VAT on certain goods and services if they're just for your own use and you're disabled or have a long-term illness.
2. Where you see VAT
In shops
VAT (if it’s due) is already included in the price of something you buy in a shop. No tax is added when you pay.
Some shops offer tax-free shopping for visitors and EU residents who leave the EU for 12 months or more.
In adverts, catalogues and price lists
This depends on who they’re aimed at:
- if they’re for the general public only, they’ll show you a price including VAT
- if they’re aimed at businesses as well as consumers, they might show the price with VAT and without
- prices aimed at businesses only don’t usually include VAT, which is charged on top of the price shown
On bills and receipts
Sometimes VAT is shown on a separate line. This doesn’t mean you’re paying extra - it just shows how much tax is included in the price.
Invoices from suppliers like builders, painters and decorators must show a separate amount for VAT and their VAT registration number.
3. VAT on energy-saving products
You pay a reduced rate of VAT (5%) when certain energy-saving products are installed in your home.
Your supplier will charge you the reduced rate on the installation and any extra work that’s part of it.
Not all products qualify for the reduced rate and you can't install them yourself.
Qualifying products
You pay the reduced rate for:
- controls for central heating and hot water systems
- draught insulation - eg around windows and doors
- insulation on walls, floors, ceilings, lofts, etc
- solar panels
- wind turbines
- water turbines
- ground-source heat pumps
- air-source heat pumps
- micro combined heat and power units
- wood-fuelled boilers
Central heating systems
For work funded through energy efficiency grants the reduced rate of VAT can also apply to the:
- installation of heating appliances
- installation, repair and maintenance of heating systems
The reduced rate is only for the grant-funded part of the work.
To qualify, you must be over 60 or getting one or more of the following:
- Child Tax Credit (but not the family element)
- Council Tax Benefit
- Disability Living Allowance
- Personal Independence Payment
- a disablement pension
- Housing Benefit
- Job Seeker's Allowance (income-based)
- Income Support
- War Disablement Pension
- Working Tax Credit
Energy products that don’t qualify
You pay the standard rate of VAT for:
- heating appliances or systems - unless you get an energy efficiency grant
- energy efficient boilers
- secondary or double glazing
- low emission glass
- energy efficient fridge freezers
4. VAT and older people
If you’re over 60, you pay a reduced rate of VAT (5%) on certain mobility aids when they’re installed in your home.
Not all products qualify for the reduced rate and you can't install them yourself.
Qualifying products
You can get the reduced rate on:
- grab rails
- ramps
- stair lifts
- bath lifts
- built-in shower seats or showers containing built-in shower seats
- walk-in baths with sealable doors
You don't get the reduced rate if you repair or replace the goods after they've been installed.
How to get the reduced rate
Your supplier should know about the reduced rate and apply it. You qualify if:
- you’re over 60 when the product is supplied or installed
- the product is installed - you don’t get the reduced rate if you just buy it
- the product is for a private home - eg your own home or one shared with friends or relatives (a residential care home doesn't qualify)
You’ll need to confirm in writing that you meet these conditions. Your supplier may give you a form for this.
You don’t have to order and pay for the product yourself - a friend, local council, charity or housing association can do it for you.
Help from your council
If you need to adapt your home because of old age you can apply to your council for equipment or help.
5. Tax-free shopping
You can sometimes get VAT refunds on goods bought in the UK if you:
- visit the UK but live outside the EU and are going back home
- are an EU resident leaving the EU for 12 months or more
- are a non-EU resident but work or study in the UK and are leaving the EU for 12 months or more
Not all retailers offer tax-free shopping and you can only get VAT refunds for goods bought within the last 3 months.
How to get a VAT refund
Get a VAT 407 form from the retailer - they might ask for proof that you're eligible, eg your passport.
Show the goods, the completed form and your receipts to customs at the point when you leave the EU (this might not be in the UK).
Customs will approve your form if everything is in order. You then take the approved form to get paid.
If you’re changing planes in another EU country and checking your goods with your luggage, you must do step 2 in the UK when you check in.
Getting paid
You can either get paid immediately at a refund booth (eg at the airport) or send the approved form to the retailer or their refund company. The retailer will tell you how you’ll get paid.
Some retailers charge a fee for handling your form. This money will be deducted from your refund.
If there are no customs officials available, you can leave your form in a customs post box. Customs will check it and contact your retailer to arrange the refund if everything is in order.
Goods you can’t get a refund for
You can’t get VAT refunds for:
- mail order goods, including internet sales
- goods you’ve already used in the EU, such as perfume
- service charges, eg hotel bills
- new or used cars
- goods worth more than £600 exported for business purposes
- goods to be exported as freight
- goods that need an export licence (except antiques)
- unmounted gemstones
- gold over 125g, or 2.75 troy ounces, or 10 tolas
- a boat you plan to sail to a destination outside the EU