Taxation in the United Kingdom/Value Added Tax

Value Added Tax (VAT) is the third largest source of government revenues in the United Kingdom. It is charged at the standard rate of 20% on supplies of goods and services. It is therefore a tax on consumer expenditure. Certain goods and services are exempt from VAT, and others are subject to VAT at a lower rate of 5% (the reduced rate) or 0% ("zero-rated"). (http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_001222&propertyType=document#toc Introduction to VAT HM Revenue & Customs) References