Domesday Live

VAT: how the rate has changed

Shopping and bills. Value Added Tax started on 1 April 1973 and replaced Purchase Tax, which had rates of 13%, 22%, 36% and 55% at the start of 1973. Most food, children's clothes and books have been zero-rated since VAT began. Some things, such as home energy, have a reduced rate.

Worth knowing

• The 15% rate in December 2008 was a temporary cut during the financial crisis, and the 17.5% rate came back in January 2010.
• VAT on home fuel started at 8% in April 1994 and was cut to 5% in September 1997. A plan to raise it to 17.5% in 1995 was dropped after the government lost a vote in the Commons in December 1994.
• From 1 October 2026 VAT on household electricity in Great Britain is 0%. The measure is set to run to 31 March 2027. Gas stays at 5%.
• Hospitality and holiday accommodation had a temporary cut to 5% from July 2020, then 12.5% from October 2021, before the standard rate returned in April 2022.
• Private school fees became subject to VAT on 1 January 2025.