In shops Any VAT due is already included in the price of something you buy in a shop. No tax is added when you pay. Some shops in Northern Ireland offer tax-free shopping for visitors. In adverts, catalogues and price lists This depends on who they’re aimed at. If they’re for: the general public only, they’ll show you a price including VAT businesses as well as consumers, they might show the price with VAT and without businesses only they do not usually include VAT , which is charged on top of the price shown On bills and receipts Sometimes VAT is shown on a separate line. This does not mean you’re paying extra - it just shows how much tax is included in the price. Invoices from suppliers like builders, painters and decorators must show a separate amount for VAT and their VAT registration number. How VAT is worked out When someone charges you VAT they multiply their selling price by the VAT rate to calculate the amount of VAT to charge. They then add this to the selling price to give you the price you actually pay - this is called the ‘gross’ price.

VAT on energy-saving products

You’ll pay a rate of either 5% or 0% VAT when certain energy-saving products are installed in your home if you’re eligible. Not all products or installations qualify for the lower rate and you cannot buy or install them yourself. Your installer will be responsible for charging you the correct rate of VAT . The rate you pay and your eligibility depends on whether you are in Great Britain (England, Scotland and Wales) or Northern Ireland. If you’re in Great Britain You’ll pay a rate of 0% VAT on both: certain products supplied by your installer the cost of all work to install those products in your home If you’re in Northern Ireland To be eligible for the reduced rate you must be over 60 or getting at least one of the following: Child Tax Credit (but not the family element) Council Tax Benefit Disability Living Allowance Personal Independence Payment a disablement pension Housing Benefit Jobseeker’s Allowance (income-based) Income Support War Disablement Pension Working Tax Credit Armed Forces Independence Payment What rate you’ll pay The rate you pay depends on how the installation costs are split. The total cost of installation is made up of two parts: the cost of the products the cost of the labour If the cost of the products (not including VAT ) is 60% or less of the total cost of the installation (not including VAT ), you’ll pay 5% VAT on everything. If the products cost more than 60% of the total cost of installation, you’ll only pay 5% VAT on the labour. You’ll pay the standard rate of 20% VAT for the products. Example - insulation materials are 60% or less of the total cost of installation Your installer charges you a total of £1000 (excluding VAT ) for installation – £400 for the materials and £600 for the labour. This means the value of the materials (£400) is only 40% of the total cost of installation (£1000). Your installer can charge you the reduced rate of 5% VAT on the total installation cost. Example - solar panels and battery materials are more than 60% of the total cost of installation Your installer charges you a total of £5,385 (excluding VAT ) for installation – £3,500 for the materials and £1,885 for the labour. This means the value of the materials (£3,500) is 65% of the total cost of installation (£5,385). Your installer can charge you standard 20% VAT on the materials part and 5% VAT on the labour part. Energy products that qualify for a reduced rate The products that qualify for a lower rate of VAT are: central heating and hot water controls draught stripping, for example insulation fixed around windows and doors to reduce draughts insulation on walls, floors, ceilings and lofts solar panels ground-source heat pumps air-source heat pumps micro combined heat and power units wood-fuelled boilers wind turbines (Great Britain only) water turbines (Great Britain only) If heating equipment is funded through an energy efficiency grant In Great Britain or Northern Ireland, you’ll pay 5% VAT on heating equipment work funded through an energy efficiency grant if you’re eligible. installation of heating appliances installation, repair and maintenance of central heating systems installation, repair and maintenance of renewable source heating systems Energy products that do not qualify You pay 20% VAT for: heating equipment that is not funded through an energy efficiency grant energy efficient boilers secondary or double glazing low emission glass energy efficient fridge freezers wind turbines (Northern Ireland only) water turbines (Northern Ireland only)

If you’re over 60, you pay a reduced rate of VAT (5%) on certain mobility aids when you pay for them to be supplied and installed in your home. Qualifying products You can get the reduced rate on: grab rails ramps stair lifts bath lifts built-in shower seats or showers containing built-in shower seats walk-in baths with sealable doors You do not get the reduced rate if you repair or replace the goods after they’ve been installed. You do not have to order and pay for the product yourself - a friend, local council, charity or housing association can do it for you. How to get the reduced rate Your supplier should know about the reduced rate and apply it. You qualify if: you’re over 60 when the product is supplied or installed the product is installed - you do not get the reduced rate if you just buy it the product is for a private home, for example your own home or one shared with friends or relatives (a residential care home does not qualify) You’ll need to confirm to your supplier in writing that you meet these conditions. They may give you a form, or you can sign your own declaration. Ask a relative, partner or other responsible person if you’re not able to fill it in yourself. Declaration: mobility aids for older people Sign and date the declaration, using this standard wording. I [full name] of [the address where the installation is taking place] declare that I am aged 60 or over and that this supply and installation qualifies for the reduced rate of VAT in accordance with The Value Added Tax (Reduced Rate) Order 2007. Help from your council If you need to adapt your home because of old age you can apply to your council for equipment or help .

You can only buy tax-free goods from shops: in Great Britain (England, Wales and Scotland) if they’re delivered straight to an address outside the UK in Northern Ireland if they’re delivered straight to an address outside the UK and the EU Check with the retailer if they offer this service. If you’re visiting Northern Ireland, you may also be able to claim tax back on goods you buy from certain shops. You claim this as a VAT refund when you leave Northern Ireland or the EU. When you may be able to get a VAT refund You can sometimes get VAT refunds on goods you buy in Northern Ireland if you: visit Northern Ireland and live outside Northern Ireland and the EU work or study in Northern Ireland but normally live outside Northern Ireland and the EU live in Northern Ireland but are leaving Northern Ireland and the EU for at least 12 months You can only get a VAT refund if you take the goods out of Northern Ireland and the EU within 3 months of buying them. Not all retailers offer VAT refunds. Taking goods from Northern Ireland to Great Britain You will not get a VAT refund if you travel from Northern Ireland straight to Great Britain or to Great Britain through any EU country , including the Republic of Ireland. If you travel from Northern Ireland to Great Britain through any other country you can get a refund. But any goods you buy in Northern Ireland will count towards your tax-free personal allowances when you enter Great Britain. If you go over your personal allowances, you’ll have to: declare them along with other goods you’re carrying when you enter Great Britain pay any import VAT due on the total goods This may mean you have to pay VAT again on the goods you bought in Northern Ireland. But you can get a refund from the retailer if when you bought the goods you got a VAT 407(NI) form. You may be able to get a VAT refund if you’re only travelling to Great Britain in order to change planes. You must be travelling to a non EU country and the goods must be in your hold luggage at all times. Check the rules on bringing goods into Great Britain . How to get a VAT refund Get a VAT 407(NI) form from the retailer. They will ask for proof that you’re eligible, for example your passport and travel documents. Complete the VAT 407(NI) form. Only include the goods you’re taking out of the country. Do not include any goods you’re leaving behind, any goods you’ve used or or any goods you’ve returned. Show the goods, the completed form and your receipts to customs at the point when you leave Northern Ireland or the EU. Customs will approve your form if everything is in order. To get paid, either take your approved form to the VAT refund desk at the airport, or send it to the retailer or refund provider with evidence of where you’re travelling to. If you’re changing planes in an EU country and checking in your goods with your luggage, you must do step 3 in Northern Ireland when you check in. If you lose your VAT 407(NI) form, you can ask the retailer for a replacement. Getting paid You can either get paid immediately at a refund booth, for example at the airport, or send the approved form to the retailer or their refund company. The retailer will tell you how you’ll get paid. If you’re travelling to Great Britain the retailer will tell you if you need to send them copies of your travel documents. Some retailers charge a fee for handling your form. This money will be deducted from your refund. If there are no customs officials available, you can leave your form in a customs post box. Customs will check it and contact your retailer to arrange the refund if everything is in order. Goods you cannot get a refund for You cannot get a VAT refund for: most mail order goods, including internet sales, delivered outside of Northern Ireland goods you’ve already used in Northern Ireland or the EU, such as perfume service charges, such as hotel bills new or used cars goods exported for business purposes where you need to make a customs declaration goods to be exported as freight goods that need an export licence (except antiques) unmounted gemstones gold or silver over 125g, 2.75 troy ounces or 10 tolas a boat you plan to sail to a destination outside the UK or the EU Find out more about claiming VAT back on tax-free shopping in Northern Ireland , including travelling to Great Britain and problems like losing your form.

Alcohol and tobacco duties

Tobacco Duty is included in the price you pay for cigarettes, cigars and other tobacco products. Alcohol Duty is included in the price you pay for beer, cider, wine or other fermented products (previously called ‘made-wine’) and spirits. Other fermented products are any alcoholic drink made by fermentation that’s not beer, cider or wine. You also pay standard rate VAT at 20% on alcohol and tobacco products. Tobacco Duty You pay different rates of Tobacco Duty on cigarettes, cigars and other tobacco products. Tobacco product Rate Cigarettes 16.5% of the retail price plus £6.69 on a packet of 20 Cigars £4.17 on a 10g cigar Hand rolling tobacco £14.30 on a 30g packet Other smoking tobacco and chewing tobacco (for example pipe tobacco) £5.50 on a 30g packet Tobacco for heating £2.06 on a typical packet of 20 sticks Alcohol Duty How much Alcohol Duty you pay depends on the alcohol’s strength, or ‘alcohol by volume’ ( ABV ), and the type of alcohol. Strength ( ABV ) Type of alcohol Rate per litre of pure alcohol Less than 3.5% Beer, still cider, wine, spirits or other fermented products £9.27 At least 3.5% but no more than 5.5% Sparkling cider £9.67 At least 3.5% but less than 8.5% Still cider £9.67 At least 3.5% but less than 8.5% Beer £21.01 At least 3.5% but less than 8.5% Spirits, wine and other fermented products £24.77 More than 5.5% but less than 8.5% Sparkling cider £24.77 At least 8.5% but no more than 22% Beer, wine, spirits or other fermented products £28.50 More than 22% Beer, wine, spirits or other fermented products £31.64 Example You buy a pack of 18 cans of 5% ABV lager (beer) at 500ml per can. The Alcohol Duty is worked out at: 18 x 500ml = 9 litres of lager. 5% (the ABV ) of 9 litres = 0.45 litres of pure alcohol. 0.45 litres of pure alcohol x £21.01 (the duty rate) = £9.45 duty to pay. Example You buy a 1 litre bottle of 40% ABV vodka (spirit). The Alcohol Duty you pay is worked out at: 1 litre of vodka. 40% (the ABV ) of 1 litre = 0.4 litres of pure alcohol. 0.4 litres of pure alcohol x £31.64 (the duty rate) = £12.65 duty to pay. Draught alcohol If you buy draught alcohol sold by a pub, bar, restaurant or other hospitality venue you may pay less duty on products below 8.5% ABV . Strength ( ABV ) Type of alcohol Rate per litre of pure alcohol Less than 3.5% Beer, spirits, wine and other fermented products £8.42 At least 3.5% but no more than 5.5% Sparkling cider £8.78 At least 3.5% but less than 8.5% Still cider £8.78 At least 3.5% but less than 8.5% Beer, spirits, wine and other fermented products £19.08 More than 5.5% but less than 8.5% Sparkling cider £19.08 Example You buy 1 pint (568ml) of 5% ABV draught still cider from a pub. The Alcohol Duty you pay is worked out at: 568ml (0.568 litres) of cider. 5% (the ABV ) X 0.568 litres = 0.0284 litres of pure alcohol. 0.0284 x £8.78 (the duty rate) = just over 24p per pint.

Fuel Duty is included in the price you pay for petrol, diesel and other fuels used in vehicles or for heating. You also pay standard rate VAT at 20% on most fuel, or the reduced rate of 5% on domestic heating fuel. Fuel Duty rates The rate you pay depends on the type of fuel. Type of fuel Rate Petrol, diesel, biodiesel and bioethanol 52.95 pence per litre Liquefied petroleum gas ( LPG ) 28.88 pence per kg Natural gas used as fuel in vehicles, for example biogas 22.57 pence per kg ‘Fuel oil’ burned in a furnace or used for heating 9.78 pence per litre You pay different rates on other types of fuel , depending on how they’re used. You may have to pay a penalty and could have your vehicle seized if you use ‘rebated’ oils like red diesel or kerosene on public roads. Report red diesel used on public roads to the Customs Hotline.

Airlines pay Air Passenger Duty ( APD ) for every passenger who flies from the UK. Ticket prices usually include a charge to cover this cost. You do not pay VAT on the cost of flights. The amount of APD the airline pays depends on how far away your destination is and the class you travel in. On commercial passenger flights the duty costs from £7 to £224 per flight. There are higher charges for some private passenger planes or charters. There’s no APD on long-haul flights from Northern Ireland or flights from the Scottish Highlands and Islands region . You can check rates for Air Passenger Duty paid by operators. If you do not take a flight If you do not take a flight you may be able to get a refund of anything you paid to cover APD costs. Contact your airline to see if you can get a refund. You may have to pay an administration fee.

Insurance Premium Tax

Insurance Premium Tax ( IPT ) is usually included in the price you pay for insurance. You do not pay VAT on insurance. The rate of IPT depends on the type of insurance and who supplies it. Standard rate IPT The rate is 12% on most types of insurance, including car, pet and home insurance. Higher rate IPT There’s a higher rate of 20% for travel insurance, and insurance arranged by the supplier (rather than an insurance company) on: vehicles, including hired vehicles - but the standard 12% rate is charged on ordinary motor insurance electronic goods and other household appliances - this includes gas central heating but not mobile phones Exemptions There’s no IPT on life insurance and income protection insurance.

Tax on shopping and services

VAT and duties

VAT is a tax you pay on most goods and services.

	% of VAT	What the rate applies to
Standard rate	20%	Most goods and services
Reduced rate	5%	Some goods and services, for example children’s car seats and some energy-saving materials in the home
Zero rate	0%	Zero-rated goods and services, for example most food and children’s clothes

Check the VAT rates on different goods and services. Some things are exempt from VAT, such as postage stamps and some financial and property transactions.

VAT is normally included in the price you see in shops, but there are some exceptions.

VAT and disabled people

You do not have to pay VAT on certain goods and services if they’re just for your own use and you’re disabled or have a long-term illness.

Other taxes and duties

You pay different taxes on:

alcohol and tobacco
petrol, diesel and other fuel
insurance
goods from abroad if you go over your customs allowance

Airlines have to pay air passenger duty for every flight from the UK. Most airline tickets include a separate charge to cover this cost.

Gambling operators (for example, betting shops and websites, casinos or slot machine owners) have to pay gambling duties on profits they make from gambling. Customers do not pay duty on their stake (what they bet or pay to play) or winnings.

View a printable version of the whole guide

Tax on shopping and services

VAT and duties

VAT and disabled people

Other taxes and duties

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Tax on shopping and services

VAT and duties

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Other taxes and duties

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