What qualifies as a taxable supply for VAT purposes?

A taxable supply is any supply of goods or services made in the UK in the course of business that is subject to VAT. This includes standard rate (20%), reduced rate (5%), and zero rate (0%) supplies, but excludes exempt supplies.

What's the difference between taxable and exempt supplies?

Taxable supplies are subject to VAT (even at 0% rate) and count towards your VAT registration threshold. Exempt supplies have no VAT charged and don't count towards the registration threshold, such as insurance or certain financial services.

Do zero-rated supplies count as taxable supplies?

Yes, zero-rated supplies (0% VAT) are still considered taxable supplies. Examples include most food items, books, and children's clothes. They count towards your VAT registration threshold unlike exempt supplies.

How do taxable supplies affect VAT registration?

All taxable supplies (standard, reduced, and zero-rated) count towards the £90,000 VAT registration threshold. Once your taxable supplies exceed this amount in any 12-month period, you must register for VAT.

What VAT rate applies to different taxable supplies?

Standard rate (20%) applies to most goods and services. Reduced rate (5%) applies to items like domestic fuel and children's car seats. Zero rate (0%) applies to essential items like most food, books, and public transport.

Can I reclaim VAT on purchases for making taxable supplies?

Yes, if you're VAT registered and make taxable supplies, you can generally reclaim VAT on business purchases and expenses. This is called input VAT and can be offset against output VAT you charge customers.

What are Taxable Supplies?

Taxable supplies are goods or services subject to VAT that businesses charge to customers, with standard rate supplies currently charged at 20% VAT in the UK. Understanding what are taxable supplies is essential for UK businesses to correctly calculate VAT obligations, maintain HMRC compliance, and determine whether VAT registration is required based on taxable turnover thresholds.

Published Feb 2, 2026

Last updated Feb 2, 2026

1 min read

Written by Jordan MaceyAAT

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<p>A taxable supply is any supply made in the UK which is not exempt from VAT.</p>

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What are Taxable Supplies?

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