VAT Rates - Lower rated

Lower VAT Rate (VAT Rate = 5%)

The mechanism for lower rate VAT is the same as “normal” VAT. It just adds 5% to the invoice for these goods and services. Just to be clear, if you buy a lower rated good (a ground source heat pump for example) you will be charged 5%. You continue to charge 20% on your invoices unless you are supplying a lower rated good or service. In the main, lower rate is just an adjustment to input VAT for most of us.

The full list can be found at HMRC lower rate VAT goods.

While I am a bit sick of typing this, please seek VAT advice if this is in anyway likely to be significant to your business.