In this section:
- Goods and services where you have to charge VAT
- Rates of VAT on different goods and services
- Trade sectors with special VAT rates, rules or concessions
- Discounts, vouchers, special offers and VAT
- Costs passed on to clients - disbursements - and VAT
- VAT invoices: what they must show
- Electronic invoices: VAT rules for issuing and receiving
- Self-billing and VAT
Goods and services where you have to charge VAT
If you are registered for VAT, you must charge VAT on all VAT taxable supplies of goods and services that you make. 'Supplies' include day-to-day sales as well as anything else that you sell or invoice for, such as assets and commission, and anything else you supply or take out of the business even if you don't charge for it, such as loans, gifts, samples and anything used privately. There are some exceptions.
VAT is payable on the full value of any supplies made, even if no VAT
was charged to the person or business who received the goods or services.
If you receive goods or services as full or part payment, you must account
for VAT on the full value of the item sold, rather than the amount that
you charged the buyer.
On this page:
- VAT is charged on sales and other supplies
- Supplies you don't need to charge VAT on
- Supplies at different rates of VAT - mixed supplies
VAT is charged on sales and other supplies
If you are registered for VAT, you must charge VAT on all supplies of goods and services that you make within the UK, at the appropriate rate, unless they are specifically either exempt from VAT or outside the scope of UK VAT.
In addition to charging VAT on the goods and services that you supply to your customers, you must account for and pay VAT on:
- items sold to staff, such as canteen meals or via vending machines
- sales of business assets
- hiring or loaning of goods to someone else
- commission received from selling something on behalf of someone else
- certain business gifts
- goods that you or your staff take out of the business for personal use, whether on a temporary or permanent basis
- services supplied to the business but then used privately
VAT is also chargeable on:
- barter
- part-exchange
- gifts
- samples
Find out more about charging VAT on international sales and movements of goods and services
Find out when you have to account for VAT on private use and self-supply
Find out when you have to account for VAT on samples, exchanges, barters and contras
Find out when you have to account for VAT on payments by instalments, deposits and credit sales
Find out more about the VAT rules for business gifts
Supplies you don't need to charge VAT on
You do not have to account for, or pay VAT on the following.
Supplies that are exempt from VAT or outside the scope of VAT
Find out more about what's exempt from VAT or outside the scope
Free samples of goods
If you give a free sample of your goods to another person or business you don't have to charge VAT in certain circumstances.
Find out when you have to account for VAT on samples
Free loans of business assets
If you make free loans of business assets to your customers then you don't have to charge VAT on the loan as long as the cost of hiring the asset is included in the price of something else you sell to your customers. For example, where you sell tea, coffee, water etc and you provide for 'free' a vending machine for these items and none of your customers pays extra for the machine.
Free goods
You do not have to account for VAT on business gifts made to the same person where the total cost of all the gifts does not exceed £50 in any 12-month period.
Find out more about the VAT rules for business gifts
Free services
You don't have to account for VAT on genuinely free services that you provide. You must not receive any payment, goods or services in return.
Supplies at different rates of VAT
Supplies at different rates of VAT are sometimes called 'mixed supplies'. This is where you charge a single price for a number of separate supplies of goods or services but one or all of them are at different VAT rates.
You need to work out the value of each supply you make at each different VAT rate to see how much VAT you need to charge. If the VAT value is based on the total price that you charge your customer, you need to split that price between each supply - this is called 'apportionment'.
There isn't a special way to do apportionment unless you are using the Tour Operators Margin Scheme where you have to use the method explained in VAT Notice 709/5. Your calculations must be fair and you will need to be able to explain them if HMRC visits or contacts you. There are different ways to do apportionment, and although you can use your own method, there are examples in VAT Notice 700, The VAT Guide.
Read about how to do apportionment in VAT Notice 700 The VAT Guide
Find out about the Tour Operators Margin Scheme in VAT Notice 709/5
