We help make your business a success

Who doesn’t pay flat rate VAT?

Most freelancers, contractors and small businesses will be liable to pay standard rate VAT which currently stands at 17.5% – though this will increase to 20% from January 4 2011. But there are exceptions for some goods and services who pay either the reduced rate or nothing at all.

Reduced Rate

Reduced rate VAT currently stands at 5% and it will not be changing in 2011. The reduced rate only applies for certain services, or in certain situations.

HMRC lays down the differing circumstances which can affect whether or not a product or service should be supplied at this lesser rate. It can depend on:

who’s providing them or buying them

the location where they’re provided

how they’re presented for sale

the precise nature of the goods or service

whether you obtain the necessary evidence

whether you keep the right records

Zero rate VAT

Not much of an explanation needed here. Zero rate VAT applies to products and services which don’t have to add VAT onto their invoices.


If you’re exempt then you don’t have to add VAT or indeed be charged VAT.

For the most exhaustive list of services which fall outside standard rate VAT, try HMRC’s brilliant guide here.


Invoice templates

Invoicing software and templates

Create, send and store sole trader invoices in a snap with our free invoice software. You can also download a selection of invoice templates for all business types.

Business guides

Business guides

From understanding expenses to starting a limited company, our downloadable business guides can help you.

Payment reminders

Payment reminders

If a client hasn't paid an invoice, download our late payment reminder templates and get that invoice paid fast.

The best accounting advice

Our accredited team are on hand to help you choose the best package

We understand that it can be difficult deciding whether or not to switch accountants, but at Crunch we’ll offer you fair, unbiased advice on what’s best for you.

Find out more