The responsibility for overseeing value-added tax (VAT) in the United Kingdom lies with Her Majesty’s Revenue and Customs (HMRC). This authority is granted to HMRC through the Commissioners for Revenue and Customs Act 2005, which grants them the administrative powers necessary to manage and enforce VAT regulations.
Prior to January 31, 2020, the United Kingdom was a member state of the European Union (EU). During its membership, the UK was obligated to incorporate the EU VAT Directive 2006/112/EC, which harmonizes various aspects of VAT legislation within the EU, into its domestic law. Consequently, the VAT Act 1994 and associated UK VAT legislation and regulations reflect these harmonized provisions.
The primary legislation in the United Kingdom regarding value-added tax can be located within the Value Added Tax Act 1994, c. 23, commonly referred to as the VAT Act 1994. The VAT Act 1994 is further elucidated and applied through the Value Added Tax Regulations 1995, known as the VAT Regulations 1995.
To ensure consistent application of the VAT Directive, the Council Implementing Regulation (EU) No. 282/2011 was established on March 15, 2011, providing binding implementing measures. These implementing regulations directly apply in EU member states without the need for national transposition.
VAT, known as Value Added Tax, is a broad-based indirect tax that is typically collected by suppliers and importers at each stage of the supply chain for goods and services. Its design aims to achieve neutrality in two key aspects. First, it intends to tax similar supplies in a consistent manner. Second, businesses are allowed to deduct the VAT they have paid, resulting in the burden of the tax falling primarily on the final customers.
Section 1 of the VAT Act 1994 specifies the transactions that are encompassed by UK VAT. These transactions include:
Taxable transactions, as outlined in Section 1 and Section 4 of the Value Added Tax Act 1994, generally include the following:
Nevertheless, there are also transactions that are neither classified as supplies of goods nor as supplies of services, and such transactions are not covered by the UK VAT system.
|HM Revenue & Customs
|VAT in local language
|£ Pound sterling
|VAT number format
|GB + 9 characters
|Standard 20%; Reduced 5%;
|Zero-rated (0%) and exempt
|Intra-EU Distance sales and electronically supplied services to consumers (OSS)
|Allowed – but only for certain conditions.
|Available – but not mandatory
|Recovery of VAT by non-established businesses
|Compliance Returns and Deadlines
|Last day of the month following the end of the period
|European Sales Listing
Last Updated: 25/08/2023
The information provided by Global VAT Compliance B.V. on this webpage is intended for general informational purposes only. Global VAT Compliance B.V. is not responsible for the accuracy of the information on these pages, and cannot be held liable for claims or losses deriving from the use of this information. If you wish to receive VAT related information please contact our experts at firstname.lastname@example.org
The HMRC released updated guidance regarding the Value-Added Tax obligations for online marketplace sellers and direct sellers.
The guidance on VAT-related payment claims for motor vehicle supplies has been updated by HM Revenue and Customs in the United Kingdom.
The HMRC has recently provided updated guidance on VAT-related payment claims under the second-hand motor vehicle payment regime.