Accounts Tax Vat

Accounts, Tax and Vat explained in plain English

VAT Rates

Introduced in 1973 Value Added Tax is an indirect tax i.e. the tax is paid over to the government by the seller rather than the consumer.  Prior to 1973 the UK had purchase tax which was levied at different rates depending on the type of goods purchased.  Below should be all the VAT rates needed in one place.

Historic VAT rates

Below are the historic and current VAT rates for the UK.  For the Flat Rate Scheme scroll down the page.

Period
From To %
01.04.73 28.07.74 10.00%
29.07.74 17.06.79 8.00%
18.06.79 31.03.91 15.00%
01.04.91 30.11.08 17.50%
01.12.08 31.12.09 15.00%
01.01.10 03.01.11 17.50%
04.01.11 - 20.00%

Registration Limit – Taxable Supplies

If you are in business and either the goods and/or services you supple are taxable supplies then you need to register for VAT once your turnover for the previous 12 months has exceeded or will soon exceed the VAT registration limit.

You can also choose to register for VAT if you want even if you have not exceeded the registration limits, although you do not have to.

Historic limits are provided below.

Prior to 1990 the registration limit system was different and included yearly and 3 monthly limits.

Period Annual Limit
From To £
21.03.90 19.03.91 25,400
20.03.91 10.03.92 35,000
11.03.92 16.03.93 36,600
17.03.93 30.11.93 37,600
01.12.93 29.11.94 45,000
30.11.94 28.11.95 46,000
29.11.95 26.11.96 47,000
27.11.96 30.11.97 48,000
01.12.97 31.03.98 49,000
01.04.98 31.03.99 50,000
01.04.99 31.03.00 51,000
01.04.00 31.03.01 52,000
01.04.01 24.04.02 54,000
25.04.02 09.04.03 55,000
10.04.03 31.03.04 56,000
01.04.04 31.03.05 58,000
01.04.05 31.03.06 60,000
01.04.06 31.03.07 61,000
01.04.07 31.03.08 64,000
01.04.08 30.04.09 67,000
01.05.09 31.03.10 68,000
01.04.10 31.03.11 70,000
01.04.11 73,000

Flat Rate Scheme
The flat rate scheme was introduced by HMRC in 2002 as a method of simplifying the VAT process by calculating VAT due based on the total VAT inclusive turnover of a business based on a pre approved flat rate percentage based on the type of business.

The scheme is available if your taxable turnover is below £150,000 per year.  It is designed to reduce the time spent preparing VAT returns on a quarterly basis although it can have the added benefit of reducing the VAT a business needs to pay.

Although you are unable to reclaim VAT on purchases the VAT percentage for your business takes this into account and it is worth measuring the benefit (if any) of the scheme.  Whilst there may be an administrative benefit of being on the scheme it may not suit everyone depending on the level of VAT reclaimed on purchases.  If you are on the Flat Rate Scheme your accountant/bookkeeper should make regular checks to ensure the scheme is beneficial.  Likewise if you are not currently on the scheme and your taxable annual turnover is below £150,000 then it is worth calculating if there is a benefit of being part of the scheme.

Those new to VAT registration can benefit from a 1% reduction in their Flat Rate Scheme percentage until the day before the 1st anniversary of registration.

Historic Flat Rate Percentages

From 24.04.02 – 31.11.08 17.5% (std rate)
From 01.01.10 – 03.01.11 17.5% (std rate)
Category of business Appropriate percentage
Accountancy or bookkeeping 13.00%
Advertising 10.00%
Agricultural services 10.00%
Any other activity not listed elsewhere 10.50%
Architect, civil and structural engineer or surveyor 13.00%
Boarding or care of animals 10.50%
Business services that are not listed elsewhere 10.50%
Catering services including restaurants and takeaways 11.00%
Computer and IT consultancy or data processing 13.00%
Computer repair services 9.50%
Dealing in waste or scrap 9.50%
Entertainment or journalism 11.00%
Estate agency or property management services 10.50%
Farming or agriculture that is not listed elsewhere 6.00%
Film, radio, television or video production 11.50%
Financial services 12.00%
Forestry or fishing 9.50%
General building or construction services 8.50%
Hairdressing or other beauty treatment services 11.50%
Hiring or renting goods 8.50%
Hotel or accommodation 9.50%
Investigation or security 10.50%
Labour-only building or construction services 13.00%
Laundry or dry-cleaning services 10.50%
Lawyer or legal services 13.00%
Library, archive, museum or other cultural activity 8.50%
Management consultancy 12.50%
Manufacturing fabricated metal products 9.50%
Manufacturing food 8.00%
Manufacturing that is not listed elsewhere 8.50%
Manufacturing yarn, textiles or clothing 8.00%
Membership organisation 7.00%
Mining or quarrying 9.00%
Packaging 8.00%
Photography 10.00%
Post offices 4.50%
Printing 7.50%
Publishing 10.00%
Pubs 6.00%
Real estate activity not listed elsewhere 12.50%
Repairing personal or household goods 9.00%
Repairing vehicles 7.50%
Retailing food, confectionary, tobacco, newspapers or children’s clothing 3.50%
Retailing pharmaceuticals, medical goods, cosmetics or toiletries 7.00%
Retailing that is not listed elsewhere 6.50%
Retailing vehicles or fuel 6.00%
Secretarial services 11.50%
Social work 10.00%
Sport or recreation 7.50%
Transport or storage, including couriers, freight, removals and taxis 9.00%
Travel agency 9.50%
Veterinary medicine 10.00%
Wholesaling agricultural products 7.00%
Wholesaling food 6.50%
Wholesaling that is not listed elsewhere 7.50%

 

From 01.12.08 – 31.12.09 15% (std rate)
Category of business Appropriate percentage
Accountancy or bookkeeping 11.50%
Advertising 8.50%
Agricultural services 7.00%
Any other activity not listed elsewhere 9.00%
Architect, civil and structural engineer or surveyor 11.00%
Boarding or care of animals 9.50%
Business services that are not listed elsewhere 9.50%
Catering services including restaurants and takeaways 10.50%
Computer and IT consultancy or data processing 11.50%
Computer repair services 10.00%
Dealing in waste or scrap 8.50%
Entertainment or journalism 9.50%
Estate agency or property management services 9.50%
Farming or agriculture that is not listed elsewhere 5.50%
Film, radio, television or video production 9.50%
Financial services 10.50%
Forestry or fishing 8.00%
General building or construction services 7.50%
Hairdressing or other beauty treatment services 10.50%
Hiring or renting goods 7.50%
Hotel or accommodation 8.50%
Investigation or security 9.00%
Labour-only building or construction services 11.50%
Laundry or dry-cleaning services 9.50%
Lawyer or legal services 12.00%
Library, archive, museum or other cultural activity 7.50%
Management consultancy 11.00%
Manufacturing fabricated metal products 7.50%
Manufacturing food 8.50%
Manufacturing that is not listed elsewhere 7.00%
Manufacturing yarn, textiles or clothing 7.50%
Membership organisation 5.50%
Mining or quarrying 8.00%
Packaging 7.50%
Photography 8.50%
Post offices 2.00%
Printing 6.50%
Publishing 8.50%
Pubs 5.50%
Real estate activity not listed elsewhere 11.00%
Repairing personal or household goods 7.50%
Repairing vehicles 6.50%
Retailing food, confectionary, tobacco, newspapers or children’s clothing 2.00%
Retailing pharmaceuticals, medical goods, cosmetics or toiletries 6.00%
Retailing that is not listed elsewhere 5.50%
Retailing vehicles or fuel 5.50%
Secretarial services 9.50%
Social work 8.00%
Sport or recreation 6.00%
Transport or storage, including couriers, freight, removals and taxis 8.00%
Travel agency 8.00%
Veterinary medicine 8.00%
Wholesaling agricultural products 5.50%
Wholesaling food 5.00%
Wholesaling that is not listed elsewhere 6.00%

 

From 04.01.11 onwards 20% (std rate)
Category of business Appropriate percentage
Accountancy or bookkeeping 14.50%
Advertising 11.00%
Agricultural services 11.00%
Any other activity not listed elsewhere 12.00%
Architect, civil and structural engineer or surveyor 14.50%
Boarding or care of animals 12.00%
Business services that are not listed elsewhere 12.00%
Catering services including restaurants and takeaways 12.50%
Computer and IT consultancy or data processing 14.50%
Computer repair services 10.50%
Dealing in waste or scrap 10.50%
Entertainment or journalism 12.50%
Estate agency or property management services 12.00%
Farming or agriculture that is not listed elsewhere 6.50%
Film, radio, television or video production 13.00%
Financial services 13.50%
Forestry or fishing 10.50%
General building or construction services 9.50%
Hairdressing or other beauty treatment services 13.00%
Hiring or renting goods 9.50%
Hotel or accommodation 10.50%
Investigation or security 12.00%
Labour-only building or construction services 14.50%
Laundry or dry-cleaning services 12.00%
Lawyer or legal services 14.50%
Library, archive, museum or other cultural activity 9.50%
Management consultancy 14.00%
Manufacturing fabricated metal products 10.50%
Manufacturing food 9.00%
Manufacturing that is not listed elsewhere 9.50%
Manufacturing yarn, textiles or clothing 9.00%
Membership organisation 8.00%
Mining or quarrying 10.00%
Packaging 9.00%
Photography 11.00%
Post offices 5.00%
Printing 8.50%
Publishing 11.00%
Pubs 6.50%
Real estate activity not listed elsewhere 14.00%
Repairing personal or household goods 10.00%
Repairing vehicles 8.50%
Retailing food, confectionary, tobacco, newspapers or children’s clothing 4.00%
Retailing pharmaceuticals, medical goods, cosmetics or toiletries 8.00%
Retailing that is not listed elsewhere 7.50%
Retailing vehicles or fuel 6.50%
Secretarial services 13.00%
Social work 11.00%
Sport or recreation 8.50%
Transport or storage, including couriers, freight, removals and taxis 10.00%
Travel agency 10.50%
Veterinary medicine 11.00%
Wholesaling agricultural products 8.00%
Wholesaling food 7.50%
Wholesaling that is not listed elsewhere 8.50%