Zero-Rated

Principally applying to VAT, 'Zero-Rated' goods or services are those on which the buyer is not charged VAT and accordingly pays no value added tax. Due to costs in connection with the goods and services often being subject to VAT, the provider can reclaim VAT charged to them relating to these supplies. This is distinct from 'VAT Exempt' supplies, which also involves there being no value added tax included in the sale price, however, the provider cannot reclaim VAT incurred in connection with these supplies.

Items currently 'Zero Rated' in the UK include books, magazines, newspapers, equipment for disabled people, babywear, children's clothes and footwear.