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Which products have VAT on them?

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Vat Scaled 1 Which Products Have Vat On Them?
Originally written by Anna Jordan on Small Business

It’s vital for your business that you know which products and services are subject to VAT and at what rate.

There are five categories of product or service for VAT. The majority of goods and services are Standard rated (subject to VAT at the standard rate, currently 17.5 per cent), some are ‘Exempt’, some are or ‘Zero-rated’ and some are at a ‘Reduced Rate’ (currently five per cent). Others are outwith the scope of VAT, which we’ll talk about in a minute.

These rates may only apply if certain conditions are met or in particular circumstances, depending on some or all of the following factors.

  • Who’s providing or buying them
  • Where they’re provided
  • How they’re presented for sale
  • The precise nature of the goods or services
  • Whether you obtain the necessary evidence
  • Whether you keep the right records
  • Whether they’re provided with other goods and services

Other conditions might also apply.

>See also: 7 tax myths for small business owner/managers exploded

Food and drink for human consumption is normally zero-rated, with the exception of catering, alcoholic drinks, confectionary, crisps and savoury snacks, sports drinks, hot food, hot takeaways, ice cream, soft drinks and mineral water.

Restaurants must always charge VAT on everything eaten either on their premises or in communal areas designated for their customers to use, like shared tables in a shopping centre. Restaurants and takeaway vendors must charge VAT on all hot takeaways and home deliveries, but do not need to charge VAT on cold takeaway food unless it’s to be eaten in a designated area. From July 15 2020 to March 31 2021, certain supplies of catering and hot takeaway food that would normally be taxable at the standard rate were liable to the reduced rate of 5 per cent.

Certain animals, animal feeding products, plants and seeds are also zero-rated, but only if the conditions the relevant VAT notice are met. Please note that products packaged as pet food are standard rated.

You may be wondering about the difference between exempt and zero-rated. Zero-rated are products and services which the Government charges VAT on but that rate is currently set to zero. Exempt items have no VAT paid or charged, but you still need to include them in your VAT return.

We’ll explain what types of goods and services you’ll find under each VAT category, including some examples. The ‘more information’ columns have links to Government resources with further details about that VAT category. For a complete list, head to VAT notices in alphabetical order on the Government’s website.

>See also: VAT on taxi fares, vehicles, fuel and staff travel – what can I claim?

Products and services with zero-rated VAT

Zero-rated supplies include water and sewerage services, books, newspapers and leaflets, talking books for the blind, transport services, exports of goods, children’s clothing and shoes and for supplies of certain qualifying buildings such as newly constructed residential buildings and substantial reconstructions of protected buildings.

Good/service More information
Advertising services for charities VAT Notice 701/58
Certain goods sold at charitable fundraising events Charity fund-raising events and VAT
Charity shops – selling donated goods Charitable donations and VAT
Construction and sale of new buildings for a relevant charitable purpose VAT Notice 708
Building services for disabled people Notice 701/7 VAT reliefs for disabled people
Equipment for blind or partially sighted people Equipment for blind or partially sighted people
Equipment for disabled people Equipment for disabled people
Magnetic tape adapted for recording speech for blind people together with apparatus for making and playing the adapted tape and certain low vision aids Aids for blind people
Dispensing of prescriptions by a registered pharmacist VAT Notice 701/57
Incontinence products VAT Notice 701/7
Maternity pads VAT Notice 701/18
Sanitary protection products VAT Notice 701/18
Low vision aids Equipment for blind or partially sighted people
Cesspools, septic tanks or similar (domestic) – emptying Emptying industrial cesspools, septic tanks or similar is standard-rated – VAT Notice 701/16
Sewerage services supplied to domestic or industrial customers Sewer and drain cleaning, unblocking or maintenance is standard-rated – VAT Notice 701/16
Water supplied to households Water supplied to industrial customers is standard-rated – VAT Notice 701/16
Substantial reconstructions to protected buildings that are buildings used as a dwelling, for a relevant residential purpose or for a relevant charitable purpose VAT Notice 708
The installation of a bathroom or lavatory, constructing ramps and widening doorways or passageways for disabled people in their own home Building services for disabled people
Construction and first freehold or long leasehold sale of a new building for a relevant charitable purpose VAT Notice 708
Construction and first freehold or long leasehold sale of a new building for relevant residential purposes VAT Notice 708
Construction and first freehold or long leasehold sale of new domestic buildings VAT Notice 708
First freehold or long leasehold sale of a commercial building converted into a dwelling or dwellings VAT Notice 708
First freehold or long leasehold sale of buildings converted for relevant residential purposes VAT Notice 708
First freehold or long leasehold sale of buildings converted for relevant charitable purposes VAT Notice 708
Sale or long lease of a new dwelling with garage or parking space VAT Notice 708
Aircraft repair and maintenance VAT Notice 744C
Freight transport to or from a place outside the UK VAT Notice 744B
Freight containers – sale, lease or hire to a place outside the UK and the EU VAT Notice 703/1
International freight transport that takes place in the UK and its territorial waters VAT Notice 744B
Passenger transport in a vehicle, boat or aircraft that carries not less than 10 passengers VAT Notice 744A
Aircraft repair and maintenance VAT Notice 744C
Airships – sale or charter VAT Notice 744C
Caravans (more than 7 metres long or more than 2.55 metres wide, can be 0% or 5%) Taxing holiday caravans
Civil aeroplanes – sale or charter Gliders – sale or charter – are standard-rated as are hot air balloons – VAT Notice 744C
Helicopters – sale or charter VAT Notice 744C
Houseboats – sale or let out on hire But holiday accommodation let in a moored houseboat is standard-rated –VAT Notice 701/20
Military aeroplanes – sale or charter VAT Notice 744C
Ship repairs and maintenance VAT Notice 744C
Shipbuilding – 15 tons or over gross tonnage VAT Notice 744C
Brochures VAT Notice 701/10
Leaflets VAT Notice 701/10
Pamphlets VAT Notice 701/10
Books VAT Notice 701/10
Children’s painting and picture books VAT Notice 701/10
Maps and charts VAT Notice 701/10
Magazines VAT Notice 701/10
Newspapers VAT Notice 701/10
Printed or copied music VAT Notice 701/10
Publications Some items are standard-rated such as exercise books, letterheads, posters – VAT Notice 701/10
Babywear VAT Notice 714
Children’s clothes and footwear VAT Notice 714
Cycle helmets – CE marked VAT Notice 701/23
Motorcycle helmets that meet safety standards VAT Notice 701/23
Protective boots and helmets for industrial use VAT Notice 701/23
Financial services including the issue, transfer or receipt of, or dealing with money, securities for money or orders for the payment of money VAT Notice 701/49

Products and services exempt from VAT

Exempt supplies include financial and insurance services, betting and gaming, health and welfare services and education.

Good/service More information
Admission charges by charities

How VAT applies to charities
Admission charges by public authorities or eligible cultural bodies to certain cultural events such as visits to museums, art exhibitions, zoos and performances VAT Notice 701/47
Antiques, works of art or similar (as assets of historic houses) sold by private treaty to public collections VAT Notice 701/12

Antiques, works of art or similar (as assets of historic houses) used to settle a tax or estate duty debt with HMRC VAT Notice 701/12
Betting and gaming – including pool betting and games of chance VAT Notice 701/29

Bingo – including remote games played on the internet, telephone, television or radio VAT Notice 701/29

Burial or cremation of dead people, or burial at sea VAT Notice 701/32

Care or medical treatment provided by a qualifying institution like a hospital, hospice or nursing home VAT Notice 701/31
Charitable fundraising events Charity fund-raising events and VAT

Education, vocational training and other connected services provided by an eligible body like a school, college or university VAT Notice 701/30

Financial service supplied as a separate element but with other goods or services VAT Notice 701/49

Financial service supplied as part of a single supply with other goods or services VAT Notice 701/49
Friendly society subscriptions for the provision of insurance VAT Notice 701/36
Funeral plans written under contracts of insurance VAT Notice 701/36
Garages or parking spaces let together with dwellings (under shorthold tenancy agreements) for permanent residential use Garages or facilities specially designed for parking are standard-rated – VAT Notice 742

Gold investment coins VAT Notice 701/21
Health services provided by registered doctors, dentists, opticians, pharmacists and other health professionals VAT Notice 701/57
Houseboat moorings VAT Notice 742
Insurance and reinsurance transactions VAT Notice 701/36
Insurance brokers and agents acting in an intermediary capacity VAT Notice 701/36
Insurance supplied as a separate element but with other goods or services VAT Notice 701/36
Insurance supplied as part of a single supply with other goods or services (Exempt if insurance is the principal element of the supply) VAT Notice 701/36
Lottery ticket sales VAT Notice 701/29
Online lottery games VAT Notice 701/29
Parking – grant, or licence, to occupy land on which incidental parking takes place VAT Notice 742
Parking spaces or garages supplied with houseboat moorings VAT Notice 742
Physical education and sports activities VAT Notice 701/45
Property, land and buildings – grant, or licence, to occupy land or buildings VAT Notice 742
Public postal services provided by the Royal Mail under a universal service obligation VAT Notice 742
Retailer commission on lottery ticket sales VAT Notice 701/29
Sponsored charitable events Charities and VAT
The granting of credit such as loans VAT Notice 701/49
The management of credit by the person who has granted it VAT Notice 701/49
The provision of the facility of instalment credit finance for example hire-purchase VAT Notice 701/49
The provision of qualifying financial intermediary services VAT Notice 701/49
The issue, transfer or dealing with a security, including shares and bonds VAT Notice 701/49
The operation of a current, deposit or savings account VAT Notice 701/49
The management of a qualifying special investment fund VAT Notice 701/49

Products and services with reduced (5 per cent) VAT

Reduced rate supplies include domestic fuel or power, installation of energy saving material, certain conversions of buildings into residential accommodation and also for renovation and alteration of residential buildings that have been empty for more than two years.

Good/service More information
Energy-saving materials permanently installed in dwellings and buildings used for a relevant residential purpose providing the total cost of them (not including VAT) is not over 60% of the cost of the installation of the products (not including VAT) Energy-saving materials – supply only – are standard-rated – VAT Notice 708/6
Mobility aids for the elderly Mobility aids for older people
Smoking cessation products – nicotine patches and gum Read Budget Note BN77 (PDF, 42K)
Electricity for domestic and residential use or for non-business use by a charity Fuel for business use is usually standard-rated – VAT Notice 701/19
Gas for domestic and residential use or for non-business use by a charity Fuel for business use is usually standard-rated – VAT Notice 701/19
Heating oil for domestic and residential use or for non-business use by a charity Fuel for business use is usually standard-rated – VAT Notice 701/19
Solid fuel for domestic and residential use or for non-business use by a charity Fuel for business use is usually standard-rated – VAT Notice 701/19
Air source heat pumps VAT Notice 708/6
Boilers – wood fuelled VAT Notice 708/6
Central heating and hot water controls VAT Notice 708/6
Draught stripping VAT Notice 708/6
Ground source heat pumps VAT Notice 708/6
Insulation VAT Notice 708/6
Micro combined heat and power units VAT Notice 708/6
Solar panels VAT Notice 708/6
Water and wind turbines VAT Notice 708/6
Closed solid fuel fire cassettes VAT Notice 708/6
Electric dual immersion water heaters with factory-insulated hot water tanks VAT Notice 708/6
Electric storage heaters VAT Notice 708/6
Gas-fired boilers VAT Notice 708/6
Gas room heaters with thermostatic controls VAT Notice 708/6
Oil-fired boilers VAT Notice 708/6
Radiators VAT Notice 708/6
The installation, repair and maintenance of a boiler, radiators, pipework and controls forming a central heating system (including micro combined heat and power systems) VAT Notice 708/6
The installation, repair and maintenance of renewable source heating systems. This means space or water heating systems which use energy from: renewable sources, including solar, wind and hydroelectric power; or near renewable sources, including ground and air heat VAT Notice 708/6
Connection or reconnection to the mains gas supply VAT Notice 708/6
Converting existing premises by increasing the number of dwellings within the building VAT Notice 708
Renovating a dwelling that has been empty for at least 2 years VAT Notice 708
Carrycots with restraint straps VAT Notice 701/23
Children’s car seats, booster seats and booster cushions VAT Notice 701/23
Children’s safety seats with bare wheeled framework Prams and pushchairs are standard-rated – VAT Notice 701/23

Products and services that are outwith the scope of VAT

VAT doesn’t apply to some goods at all. These are outwith the scope of VAT. If you sell them, you won’t be charged VAT and if you buy them, there won’t be any VAT to reclaim.

Good/service More information
Voluntary donations to charity Donations to charities
Welfare services provided by charities at significantly below cost VAT Notice 701/1
Tolls for bridges, tunnels and roads operated by public authorities Privately-operated tolls for bridges, tunnels and roads are standard-rated – VAT Notice 700
Direct-mail postal services meeting all the conditions of VAT Notice 700/24 3.2 and 3.3 VAT Notice 700/24


If you’re in any doubt, it’s best to check in with an accountant. The Government website also has a lot of useful resources, including VAT on goods sent overseas.

Read more

How to avoid paying £130,000 in VAT registration fees if you export to EU

Which products have VAT on them?



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