In the United Kingdom in 2026, goods and services are categorized into standard rate (20%), reduced rate (5%), zero-rate (0%), or VAT-exempt. Items that are essentially "VAT free" to the consumer fall into the zero-rated or exempt categories. Zero-rated items include most basic foodstuffs (excluding luxury items like chocolate-covered biscuits), children's clothing and footwear, books, newspapers, and magazines. Essential medical supplies like prescription medicines and certain disability equipment are also zero-rated. VAT-exempt services, which technically do not have VAT applied at all, include most financial and insurance services, postage stamps, and health services provided by registered doctors or dentists. Education and vocational training provided by eligible bodies are also exempt. In 2026, it is important for businesses to distinguish between zero-rated and exempt items, as only the former allows for the recovery of "input tax" on business expenses. For the average resident or tourist, these exemptions on essentials help mitigate the cost of living.