The VAT rate in the UK is currently 20%. This means that if you buy something for £100, then VAT will be added to the price.
The VAT rates are different in other countries around Europe and can range from 15% to 25%. It’s important to know what the current rate is, so make sure you check before making any purchases!
Source:https://www.vatcalculator.info/current-uk-vat-rate/?
What is VAT and how does it work?
Value Added Tax (VAT) is a special tax you pay on goods and services. It’s not the same as income tax or corporation tax.
Every year there’s an extensive list of things VAT doesn’t apply to, so make sure you check before making any purchases!
Businesses that are VAT registered must account for VAT at 20% to HM Revenue and Customs (HMRC) on everything they supply.
They must also account for VAT at 20% on any profit that is above the VAT threshold. This means that if their turnover goes up, then the profit figure will be higher and may mean that they become liable to register as a business.
The current UK VAT rate – 20%
As of 1st January 2010, the standard rate of VAT in Great Britain is 20%. This means that if you buy something for £100, then VAT will be added to the price.
The VAT rates are different in other countries around Europe and can range from 15% to 25%. It’s important to know what the current rate is, so make sure you check before making any purchases!
Some items are zero-rated or exempt from VAT, which means that the tax isn’t paid on them. This includes most food, books, and children’s clothes. Some energy-saving materials for use in homes are also zero-rated.
How the UK’s new Brexit plan will affect VAT rates in the future
The future of the UK’s VAT rates remains uncertain post-Brexit. At the moment, countries in Europe are required to implement a minimum VAT rate of 15%. The European Union determines the standard VAT rate throughout Europe, and this affects other member states too. For example, if France decides to put its VAT up from 20% to 21%, then the UK would have to put it up from 20% to 21% too.
This was confirmed in a statement released by HM Treasury: “In the short term, there may be some economic uncertainty about our immediate trading relationships as we adjust to new arrangements. We will, however, want to make sure that any change to the UK’s VAT rates or rules is done through an open and transparent process.”
But what does this mean for us? Will the rate go up again following Brexit? A survey carried out by Global Blue found that two-thirds of British shoppers believe more items will become VAT exempt after Brexit, with around 90% believing that petrol and energy bills will become cheaper.
What to do if you’re an international business looking for a new base in Europe
The process of choosing a suitable location for your business can be quite difficult, particularly if you’re considering expanding into new markets or going international. If you need any help finding the best place for your business, contact our Expat Desk!
Customers will have to pay 20% tax on goods and services in the United Kingdom from Friday onwards. The UK has opted to change its VAT rate from 17.5% in 2015 in preparation for Brexit which is going to be effective from Friday, January 19th.
The change in the VAT rate will be applicable on a wide range of items from food to clothing and from children’s diapers to mobile phones. The current VAT rates vary from country to country in Europe, ranging from 15% to 25%. In the UK, it is currently 20% but will be increasing by 5 percentage points.