Knowing Your UK Tax Codes

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.






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Source:http://www.dummies.com/how-to/content/knowing-your-uk-tax-codes.html

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