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Is there VAT on train tickets?

There is no VAT to pay on train tickets in the UK. They are zero rated for VAT. The same goes for other forms of public transport, including bus fares, air travel and taxi fares.

Train tickets are not VAT exempt. They are zero rated. Technically, VAT is charged on them at a rate of 0%. This is an important difference. When businesses calculate their VATable sales, for example, to determine whether they need to register for VAT, they must include zero rated goods and services, such as train tickets. But they should not include VAT exempt goods and services in the total.

Examples of VAT exempt services that businesses often use include postage stamps and educational training.

VAT rules in the UK can be complicated and there are a number of exceptions. It’s important to comply with reporting and claims, to avoid challenges by HMRC. HMRC has the power to fine and prosecute organisations and their directors if they don’t apply VAT rules correctly. The government website has full guidance on VAT categories, rates and exemptions. Many businesses use a specialist accountant to advise and check their VAT returns and accounting.

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