UK 2028 VAT
UK 2028 VAT: 20% standard, 5% reduced, 0% zero. Registration £90k threshold. Flat Rate Scheme available for small business — apply across sector rates.
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UK 2028 VAT rates: 20% standard, 5% reduced (energy bills, children's car seats, some hygiene), 0% zero (most food, books, children's clothes). Registration threshold £90,000 turnover (raised from £85,000 in April 2024). Making Tax Digital (MTD) for VAT mandatory for all registered businesses.
£90k Registration Threshold
April 2024 Budget raised UK VAT registration threshold from £85,000 to £90,000 — first rise since 2017. Helps small businesses near the threshold avoid the 'VAT cliff'. De-registration threshold £88,000. Voluntary registration available below threshold if input VAT recovery beneficial.
Flat Rate Scheme
Available if turnover < £150,000 ex-VAT. Pay flat % of gross turnover to HMRC instead of standard input/output mechanism. Rate varies by sector: 4% retail, 14.5% consultancy, 16.5% limited cost trader. Simpler bookkeeping but can be more expensive — model both.
MTD Mandatory
All VAT-registered businesses must keep digital records + submit via MTD-compatible software. Spreadsheets only OK if used with bridging software. Penalty regime: points-based system. Quarterly returns due 1 month + 7 days after period end.
Last updated May 2026. Sources: HMRC VAT.