The VAT Flat Rate Scheme can put real money back in your pocket — or cost you money — depending entirely on one number: your sector's flat rate percentage. A consultant paying 14.5% while charging customers 20% keeps a healthy slice of every invoice. A limited-cost business stuck on 16.5% might pay almost the full 20% anyway. This guide lists every current 2026 VAT flat rate scheme percentage, shows you how to pick the right one, and works through the figures in pounds and pence.
2026/27 context: the standard UK VAT rate is 20%, with 5% and 0% rates for specific supplies. The VAT registration threshold is £90,000 of taxable turnover in a rolling 12-month period. The flat rate percentages below are confirmed against current HMRC guidance (VAT Notice 733).
How the Flat Rate Scheme works in 2026: the 60-second recap
Under standard VAT accounting, you pay HMRC the difference between the VAT you charge customers (output VAT) and the VAT you pay suppliers (input VAT). Under the Flat Rate Scheme you instead:
- charge VAT to your customers at the normal rate (usually 20%)
- pay HMRC a fixed percentage of your VAT-inclusive turnover
- keep the difference between what you charged and what you paid over
You cannot reclaim input VAT on purchases — with one exception: single capital assets costing more than £2,000 (including VAT).
Joining the scheme is open to VAT-registered businesses that expect their VAT taxable turnover to be £150,000 or less (excluding VAT) in the next 12 months. You must leave on the anniversary of joining if your turnover in the previous 12 months was more than £230,000 (including VAT), or if you expect it to exceed that in the next 12 months.
VAT flat rate percentages 2026 — the full table
Find your trade below. These are the current rates; the temporary reduced rates that applied to hospitality during 2020–2022 have ended, and the rates shown are the standard 2026 figures.
| Type of business | VAT flat rate (%) |
|---|---|
| Accountancy or book-keeping | 14.5 |
| Advertising | 11 |
| Agricultural services | 11 |
| Any other activity not listed elsewhere | 12 |
| Architect, civil and structural engineer or surveyor | 14.5 |
| Boarding or care of animals | 12 |
| Business services not listed elsewhere | 12 |
| Catering services including restaurants and takeaways | 12.5 |
| Computer and IT consultancy or data processing | 14.5 |
| Computer repair services | 10.5 |
| Entertainment or journalism | 12.5 |
| Estate agency or property management services | 12 |
| Farming or agriculture not listed elsewhere | 6.5 |
| Film, radio, television or video production | 13 |
| Financial services | 13.5 |
| Forestry or fishing | 10.5 |
| General building or construction services | 9.5 |
| Hairdressing or other beauty treatment services | 13 |
| Hiring or renting goods | 9.5 |
| Hotel or accommodation | 10.5 |
| Investigation or security | 12 |
| Labour-only building or construction services | 14.5 |
| Laundry or dry-cleaning services | 12 |
| Lawyer or legal services | 14.5 |
| Library, archive, museum or other cultural activity | 9.5 |
| Management consultancy | 14 |
| Manufacturing fabricated metal products | 10.5 |
| Manufacturing food | 9 |
| Manufacturing not listed elsewhere | 9.5 |
| Manufacturing yarn, textiles or clothing | 9 |
| Membership organisation | 8 |
| Mining or quarrying | 10 |
| Packaging | 9 |
| Photography | 11 |
| Post offices | 5 |
| Printing | 8.5 |
| Publishing | 11 |
| Pubs | 6.5 |
| Real estate activity not listed elsewhere | 14 |
| Repairing personal or household goods | 10 |
| Repairing vehicles | 8.5 |
| Retailing food, confectionery, tobacco, newspapers or children's clothing | 4 |
| Retailing pharmaceuticals, medical goods, cosmetics or toiletries | 8 |
| Retailing not listed elsewhere | 7.5 |
| Retailing vehicles or fuel | 6.5 |
| Secretarial services | 13 |
| Social work | 11 |
| Sport or recreation | 8.5 |
| Transport or storage, including couriers, freight, removals and taxis | 10 |
| Travel agency | 10.5 |
| Veterinary medicine | 11 |
| Wholesaling agricultural products | 8 |
| Wholesaling food | 7.5 |
| Wholesaling not listed elsewhere | 8.5 |
How to choose your flat rate percentage
Use the trade that is the greater part of your business
If you run more than one business activity, use the percentage for the trade that makes up the greater part of your turnover. For example, if you are a plumber who also sells a small amount of bathroom fittings, the general building/construction rate of 9.5% applies to your whole VAT-inclusive turnover — not just the plumbing income.
Check the limited-cost business test
Many service businesses are caught by this rule. You are classed as a limited cost business if your spending on goods is:
- less than 2% of your turnover, or
- less than £1,000 a year (if your goods costs are more than 2%)
Limited cost businesses must use 16.5% instead of their sector rate. At 16.5% of VAT-inclusive turnover, the scheme saves very little compared with standard VAT — always run the numbers before joining.
Take the 1% first-year discount
Businesses in their first year of VAT registration get a 1% discount on the flat rate percentage. A photographer at 11% pays 10% in year one; an IT consultant at 14.5% pays 13.5%. Limited-cost businesses on 16.5% still get the discount, paying 15.5% in their first year.
Worked examples: flat rate VAT in pounds and pence
Example 1: Photographer (11% rate)
You invoice a client £1,000 plus 20% VAT. The client pays £1,200 including VAT.
- Flat rate payment: £1,200 × 11% = £132 to HMRC
- You keep: £1,200 − £132 = £1,068
Under standard VAT you would owe the full £200 of output VAT (minus any input VAT reclaimed on purchases). The scheme saves you £68 on this invoice before input VAT is considered.
Example 2: IT consultant in first year (13.5% discounted rate)
You invoice £10,000 plus 20% VAT, so the client pays £12,000 including VAT.
- Flat rate payment: £12,000 × 13.5% = £1,620 to HMRC
- You keep: £12,000 − £1,620 = £10,380
The standard 14.5% rate would cost £1,740, so the first-year discount saves £120 on this invoice.
Example 3: Limited-cost consultant (16.5% rate)
Same £12,000 VAT-inclusive invoice, but your goods spending is only £800 a year (0.9% of turnover), so the limited-cost rule applies.
- Flat rate payment: £12,000 × 16.5% = £1,980 to HMRC
- You keep: £12,000 − £1,980 = £10,020
Standard VAT would cost £2,000 of output VAT (before input VAT reclaims). The scheme saves just £20 — and if you had any input VAT to reclaim, standard accounting would win.
Example 4: Pub (6.5% rate)
Drinks sales of £20,000 including VAT for the quarter.
- Flat rate payment: £20,000 × 6.5% = £1,300 to HMRC
- You keep: £20,000 − £1,300 = £18,700
Lower-rate sectors like pubs, food retailers and hotels are where the scheme's savings are typically largest.
Joining, leaving and changing rate
Joining: you can join if you are VAT-registered (or register for VAT and join at the same time) and expect VAT taxable turnover of £150,000 or less excluding VAT in the next 12 months. You cannot join if you left the scheme in the last 12 months, committed a VAT offence in the last 12 months, or joined a margin or capital-goods scheme.
Leaving: you can leave at any time, but you must leave if you are no longer eligible. On the anniversary of joining, check whether turnover in the last 12 months exceeded £230,000 including VAT. After leaving, you must wait 12 months before rejoining.
Changing rate: if your trade changes, calculate turnover at the old rate up to the last day of the old activity, then apply the new rate from the change date.
Schemes you cannot combine with the flat rate scheme
- Cash Accounting Scheme: you cannot use both. The Flat Rate Scheme has its own cash-based method of calculating turnover instead.
- Annual Accounting Scheme: you can combine these — join the annual scheme first, then the flat rate scheme.
Remember that capital expenditure is treated specially: you can reclaim input VAT on single capital assets costing more than £2,000 including VAT, even while on the flat rate scheme.
FAQs: VAT flat rate scheme percentages 2026
What is the VAT flat rate for consultants in 2026?
Business or management consultancy is 14%, and computer/IT consultancy is 14.5%. Limited-cost businesses in either trade pay 16.5% instead.
What is the VAT flat rate for builders in 2026?
General building or construction services pay 9.5%; labour-only building or construction services pay 14.5%. Labour-only means the value of materials supplied is less than 10% of turnover for those services.
What is the VAT flat rate for restaurants and takeaways in 2026?
Catering services including restaurants and takeaways pay 12.5% in 2026. The temporary reduced hospitality rates (4.5% and 8.5%) applied only during the pandemic recovery period and ended on 31 March 2022.
Do I pay the flat rate on my VAT-inclusive or VAT-exclusive turnover?
On your VAT-inclusive turnover — that includes the VAT you charged customers. This is different from standard VAT turnover and catches many businesses out.
What happens if I pick the wrong percentage?
Contact HMRC's VAT helpline. You may owe additional VAT for underpaid periods, so getting the sector right at the start matters.
Is the flat rate scheme still worth it in 2026?
It depends on your rate and your input VAT. Businesses with low input VAT and a low sector rate (pubs, food retail, hotels, general building) typically gain the most; limited-cost service businesses at 16.5% often gain almost nothing.
Related reading
- How to Calculate Flat Rate VAT — the worked calculation guide behind these percentages
- VAT Return Boxes — where flat rate scheme users report their turnover on the VAT return
- When to Register for VAT UK — the £90,000 registration threshold explained
Educational information and estimates. These tools do not submit VAT returns or determine the treatment of a specific transaction.