Definition:
VAT is the tax payable on all goods and services in the UK, currently rated as 15%.
On shop-bought goods the tax is included so you do not need to add it to the price displayed. If a bottle of water is priced at 70p then 70p is what you will pay the shopkeeper.
For larger, more expensive purchases you may see the breakdown of goods/service price, then the VAT price, then the total payable.
Also Known As: Value Added Tax
Alternate Spellings: V.A.T.
