UK VAT Guide 2026 — Rates, Registration & Schemes
The UK uses Value Added Tax (VAT), administered by HMRC. If you sell online from the UK — whether on Shopify, WooCommerce, Etsy, Amazon, or via Instagram — this page covers everything you need to know before diving into specific selling corridors.
UK VAT at a glance
Section titled “UK VAT at a glance”| Tax type | VAT (Value Added Tax) |
| Authority | HMRC |
| Registration threshold | £90,000 rolling 12-month taxable turnover |
| Standard rate | 20% |
| Reduced rate | 5% (domestic energy, child car seats) |
| Zero rate | 0% (children’s clothing, books, most food) |
| Filing frequency | Quarterly (default) |
| Filing method | Making Tax Digital (MTD) compatible software only |
| Filing deadline | 1 month + 7 days after quarter ends |
| VAT number format | GB followed by 9 digits |
Selling corridors
Section titled “Selling corridors”Pick where you’re selling to:
- Selling to UK customers — Domestic VAT obligations, registration, rates, invoicing, and filing
- Selling to UK Businesses — Domestic VAT obligations, registration, rates, invoicing, and filing
- Selling to the EU — IOSS, destination-country VAT, the €150 threshold, B2B reverse charge (coming soon)
Just registered or approaching the threshold? Start here:
- UK VAT Setup Checklist — Step-by-step: register with HMRC, choose a scheme, configure your store, set up invoicing, and file your first return.
Key concepts for UK sellers
Section titled “Key concepts for UK sellers”The £90,000 threshold
Section titled “The £90,000 threshold”You must register for VAT once your rolling 12-month taxable turnover exceeds £90,000. All sales channels count together — Shopify, Instagram, Stripe links, market stalls. There’s also a forward-look test: if you expect to exceed £90,000 in the next 30 days alone, you must register immediately.
Below the threshold, you have no VAT obligations beyond tracking your turnover monthly.
VAT rates by product category
Section titled “VAT rates by product category”Most goods and services are taxed at 20%. But some categories get special treatment:
| Category | Rate | Examples |
|---|---|---|
| Standard | 20% | Adult clothing, homewares, craft supplies, digital services |
| Reduced | 5% | Domestic energy, child car seats |
| Zero | 0% | Children’s clothing (under 14), books, most food |
| Exempt | N/A | Insurance, financial services |
Zero-rated goods still count toward the £90,000 threshold. Exempt goods don’t.
Making Tax Digital
Section titled “Making Tax Digital”All VAT-registered businesses must file returns through MTD-compatible software — FreeAgent, Xero, QuickBooks, or similar. You cannot file manually through the HMRC website.