Even if you don’t need to use all of the tax codes all of the time, you probably need some of them sometimes. For those times:

  • T0: Zero-rated. VAT is not payable on zero-rated supplies. Examples of this include books, children’s clothes and some items of food.

  • T1: Standard rate. Currently 20 per cent.

  • T2: Exempt from VAT. For example, postage stamps.

  • T4: Sales to customers in the European Union (EU).

  • T5: Lower-rate VAT, usually 5 per cent. Applies to the purchase of energy-saving materials and, for example, reclaiming VAT on DIY building work.

  • T7: Zero-rated purchases from suppliers in the EU.

  • T8: Standard-rated purchases from suppliers in the EU.

  • T9: Transactions not involving VAT. For example, wages.