02/09/2026
Understanding VAT rates is essential for keeping your business compliant and avoiding costly classification mistakes. Zero-rated VAT means certain goods and services are taxable at 0% VAT. Although customers are not charged VAT on these supplies, VAT-registered businesses may still be able to reclaim VAT on related business purchases.
Common examples of zero-rated supplies can include:
✔️ Many basic food items
✔️ Qualifying children’s clothing and footwear
✔️ Books and certain publications
✔️ Certain passenger transport services
✔️ Qualifying exports outside the UK
It’s also important to understand the difference between zero-rated and VAT-exempt supplies, as the rules around reclaiming input VAT can differ.
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