Define: Zero-Rated Goods And Services

UK Accounting Glossary

Definition: Zero-Rated Goods And Services


Quick Summary of Zero-Rated Goods And Services


Goods and services that are taxable for value added tax (VAT) purposes but are currently subject to a tax rate of zero.




What is the dictionary definition of Zero-Rated Goods And Services?

Dictionary Definition


Refers to goods and services that are taxable for value added tax purposes but are currently subject to a zero percent tax rate.

These differs from exempt in that the VAT attributable is allowable for input tax credit.


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Full Definition of Zero-Rated Goods And Services


Zero-rated goods and services are goods and services that are taxable for value-added tax purposes but are currently subject to a tax rate of zero.

These differ from exempt status in that the VAT attributable is allowable for input tax credit.

Examples of Zero-rated supplies include:

  • Most food items
  • Sewerage and water services for non-industrial users
  • Books and periodicals
  • Certain Charitable Supplies
  • New Domestic Buildings
  • Transport fares for vehicles intended to carry not less than 10 passengers
  • Banknotes
  • Medicines
  • Children’s footwear and clothing
  • Fuel for Lifeboats and Air Ambulances
  • All exports.

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Zero-Rated Goods And Services FAQ's


Why are products zero rated?

Countries using VAT designate certain goods as zero-rated goods. Zero-rated goods are typically individualised items. In many cases, buyers use zero-rated goods in production and benefit from paying a lower price for the goods without the tax.


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Zero-Rated Goods And Services. PayrollHeaven.com. Retrieved November 20, 2019, from PayrollHeaven.com website: https://payrollheaven.com/define/zero-rated-goods-and-services/

Definition Sources


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This glossary post was last updated: 27th January 2019.