The United Kingdom introduced its value added tax (VAT) system in 1973, shortly after joining the European Economic Community (EEC). Although the U.K. left the European Union (EU) on 31 January 2020, its VAT system remains largely aligned with core EU VAT principles, with certain domestic deviations introduced following Brexit.
U.K. VAT is governed primarily by the Value Added Tax Act 1994 and associated secondary legislation. VAT administration is carried out by His Majesty’s Revenue & Customs (HMRC), the U.K.’s tax authority, which is responsible for issuing guidance, processing VAT registrations and returns, and enforcing compliance with VAT legislation.
Businesses carrying out taxable activities in the U.K. — whether established in the U.K. or overseas — must comply with U.K. VAT obligations. This includes registering for VAT when required, applying the correct VAT rates, issuing VAT-compliant invoices where applicable, maintaining appropriate records, and submitting periodic VAT returns to HMRC.
