Common VAT codes

Standard rate VAT (from January 4, 2011 forward)

If you are registered for VAT, you have to charge VAT at the standard rate on all goods and services you supply, unless they fall into another category.

Before using anything other than the standard rate, go to HMRC's website to find out what rate of VAT applies in any particular set of circumstances.

VAT at 20% to box 4

VAT at 20% to box 1

Net purchase amount to box 7

Net sale amount to box 6

Standard rate VAT (before January 4, 2011)

This is the standard rate of VAT in use 1991 to 31 November 2008 and 1 January 2010 to 3 January 2011.

VAT at 17.5% to box 4

VAT at 17.5% to box 1

Net purchase amount to box 7

Net sale amount to box 6

Reduced rate VAT

A reduced rate of VAT applies to some goods and services - including items such as domestic heating fuel and children's car seats.

Sometimes the reduced rate only applies in certain circumstances, or it may depend on who the customer is.

It's important to read the detailed rules on HMRC's website to understand when the reduced rate can be used.

VAT at 5% to box 4

VAT at 5% to box 1

Net purchase amount to box 7

Net sale amount to box 6

Zero rate VAT

Some goods and services are zero-rated. This means they are taxable for VAT, but the VAT rate is zero percent. Sometimes the reduced rate only applies in certain circumstances, or it may depend on who the customer is.

Read the detailed rules on HMRC's website to understand when the zero rate can be used.

VAT at 0% to box 4

VAT at 0% to box 1

Net purchase amount to box 7

Net sale amount to box 6

Exempt

Some goods and services are exempt from VAT. These include:

• insurance (but there is an Insurance Premium Tax (IPT) that may apply instead)
• some services from doctors and dentists
• some types of education and training

Special rules apply for businesses that are exempt or 'partly exempt'. Please go to HMRC's website for further details.

No VAT

No VAT

Net purchase amount to box 7

Net sale amount to box 6

Intra EU B2B purchase of Goods (after 4th January 2011)

Used for Intra EU B2B (business to business) purchase (acquisition) of goods after 4th January 2011.

In B2B transactions, it is the customer who must account for any VAT due via the reverse charge mechanism (i.e. the customer must act as if they are both the supplier and the recipient of the goods).

Intra EU B2B purchase of Goods (before 4th January 2011)

Used for Intra EU B2B (business to business) purchase (acquisition) of goods between 1991 to 31 November 2008 and 1 January 2010 to 3 January 2011.

In B2B transactions, it is the customer who must account for any VAT due via the reverse charge mechanism (i.e. the customer must act as if they are both the supplier and the recipient of the goods).

Intra EU B2B Supply of Goods

Used for Intra EU B2B (business to business) sale (supply) of goods.

If the EU customer is not VAT-registered, then the applicable UK rate of VAT is charged.

Intra EU B2B purchase of Services (after 4th January 2011)

Used for Intra EU B2B (business to business) purchase of services after 4th January 2011.

In B2B transactions, it is the customer who must account for any VAT due via the reverse charge mechanism (i.e. the customer must act as if they are both the supplier and the recipient of the services).

Intra EU B2B purchase of Services (before 4th January 2011)

Used for Intra EU B2B (business to business) purchase of services between 1991 to 31 November 2008 and 1 January 2010 to 3 January 2011.

In B2B transactions, it is the customer who must account for any VAT due via the reverse charge mechanism (i.e. the customer must act as if they are both the supplier and the recipient of the services).

Intra EU B2B Supply of Services

Used for Intra EU B2B (business to business) sale of services. If the EU customer is not VAT-registered, then the applicable UK rate of VAT is charged.

It is important to note that the Place of Supply on services changed from January 2010 as follows:

• For B2B (business to business), the place of supply is where the customer (receiver of services) is based.
• For B2C (business to consumer) the place of supply is where the business (provider of services) is based.

Intra EU Reverse Charge

Used for Intra EU B2B (business to business) transactions on computer chips and mobile phones. (Notice 735 refers).

• Box 1 (output VAT)
• Box 4 (input VAT)
• Box 7 (purchase value)

• Box 1 (output VAT)
• Box 4 (input VAT)
• Box 6 (value of deemed supply)
• Box 7 (purchase value)

Outside the Scope of VAT

Some goods and services are outside the scope of VAT and are not reported on the VAT return. This includes anything you:

• sell (or otherwise supply) when you're not registered for VAT - and you don't need to be registered
• buy or sell outside the European Union (EU)
• sell (or otherwise supply) but not as part of your business - for example, if you occasionally receive income from sources such as leisure activities or hobbies
• buy and sell for your own personal use, such as a hobby

Other goods and services outside the scope of VAT include:

• donations to charity freely given by a business where the giver does not receive anything in return
• statutory fees and services, e.g., MOT testing, congestion charge
• tolls for bridges, tunnels and roads operated by public authorities
• low cost welfare services provided by charities