Is There VAT on Train Travel? HMRC Rules Explained Clearly

Many questions regarding VAT on train travel are common among businesses, accountants, and micro-entities managing expenses and VAT returns. People often ask, “Is there VAT on train tickets?” or “Do you pay VAT on train tickets?” The answers are not always clear from the ticket receipts. In the UK, most passenger train travel is zero-rated for VAT. This means no VAT is charged on standard tickets, season tickets, or advance fares. While you cannot reclaim VAT on the fare itself, businesses may be able to reclaim VAT on certain associated costs, such as booking or administration fees. In this guide, we explain how VAT on train travel is applied, how much VAT is charged on train tickets, and when VAT can be reclaimed.

What is VAT?

Value Added Tax (VAT) is a consumption tax charged on most goods and services. It is collected by businesses from consumers and paid to HMRC. VAT-registered businesses charge VAT on their sales, collect it from customers, and then pay it to HMRC.

Is there VAT on Train Travel?

Most train tickets in the UK are zero-rated for VAT. This means no VAT is charged on the fare, and therefore nothing can be reclaimed. This applies to standard domestic train travel, including advance and season tickets.

• Standard class tickets: The standard train tickets usually do not have VAT added to them.
• Children’s, senior citizens’, and disabled persons’ tickets: The government may tax these special train tickets at 5% VAT instead of the regular 20% rate.
• First-class tickets and premium services: First-class tickets plus premium services pay 20% VAT as standard.

Do You Pay VAT on Train Tickets?

In the UK, most domestic passenger train travel is zero-rated for VAT. This means you do not pay VAT on train tickets, and consequently, businesses cannot reclaim VAT on the fare. This applies to both standard and first-class fares across the UK.

How Much VAT is Charged on Train Tickets?

Although passenger train travel is zero-rated for VAT in the UK, VAT is charged at 20% on specific on-board catering.

What Does Zero-Rated VAT Mean?

Even though train travel serves as a taxable item, many passengers wonder, Is there VAT on train travel. In reality, it carries no tax obligation at all. Train costs for passengers stay low because of this system. Service providers claim VAT refunds on all their operating expenses, including train maintenance, fuel network adjustments and vehicle renovations. Train companies use tax refund money to invest in better train services and upgrade their trains while improving their entire network.

Is There VAT On Public Transportation in the UK?

Public transport, including passenger train travel, is generally zero-rated for VAT. It means no VAT is charged on train travel tickets. 

• Most public transport, including buses, coaches, and trains, is zero-rated when vehicles are designed to carry10 or more passengers.
• While tickets are 0%, third-party booking sites may charge VAT on their service and booking fees.
• Unlike public transport, taxi fares often have 20% VAT applied.
• Because the VAT rate is 0%, there is no VAT component to reclaim on standard passenger fares.

Can You Claim VAT on Train Tickets?

In the UK, you cannot claim VAT back on standard passenger train tickets, as they are zero-rated (0% VAT) by HMRC. This means no VAT is paid on the fare. Since you cannot reclaim VAT on train travel costs themselves, you may be able to reclaim VAT charged by agencies on admin or booking fees.

How Does This Affect Train Ticket Prices?

Passengers do not need to pay tax because VAT does not apply to train tickets, thus they are cheaper to use than other forms of transport. For example:

• Flights: Domestic flights in the UK follow Air Passenger Duty policies instead of Value Added Tax rules.

• Taxis & Private Hire Vehicles: Taxis and Private Hire cars usually charge 20% VAT, depending on their operators' policies.
• Buses & Coaches: Services between buses and coaches follow the same VAT exemption provided to trains.

Our detailed information about VAT instalment payments explains whether organisations can split their VAT payments into separate parts.

What Business Travel Expenses can you claim VAT on?

If you are VAT-registered, then you can reclaim VAT on the following expenses for business journeys:

• Accommodation

This includes hotels, B&Bs, and guesthouses.

• Taxi Fares

Provided the taxi driver is VAT-registered.

• Parking Fees

Provided a valid VAT receipt is obtained.

• Fuel

If purchasing fuel for a company car, VAT can be reclaimed. If employees use personal cars, VAT can be reclaimed on the fuel element of their mileage claim.

• Congestion Charges & Tolls

These often include VAT; always check the receipt.

• Car Hire

Generally, 50% of the VAT on leasing or hiring a car can be reclaimed, provided there is some private use.

Are There Any Exceptions Where VAT Applies to Train Travel?

While learning is there VAT on train travel, one more question arises: where does VAT exemption apply to train travel? Standard train fares have a zero VAT rate, but certain circumstances require paying VAT, including:

• Onboard Services:

Train passengers must pay VAT on food and drink orders based on the heat level.

• First-Class Lounges & Extras:

Access to first-class lounges plus other premium extras normally carries VAT.

• International Rail Travel: 

International trains like Eurostar face different VAT standards for passengers starting or ending their journey in specific nations.

• Transport Services Linked to Admission Fees: 

When admission fees include train travel from entertainment spots like parks and museums to and from locations, it must follow 20% VAT tax standards.

• Train Design and Seating Capacity: 

Under this rule, trains with 10 or more passenger seats, including staff, receive no VAT tax. Smaller vehicles do not fit into this special tax treatment.

Why Is Train Travel VAT-free in the UK?

Many People frequently ask, “Is there VAT on train travel?” The United Kingdom government keeps train travel VAT tax-free as a way to promote public transportation. The benefits include:

• Making train travel more affordable: 

People who work and enjoy vacations can better use trains to travel at cheaper ticket prices.

• Reducing congestion & pollution:

People prefer trains over driving because their choice helps decrease traffic problems while lowering emissions.

• Supporting the economy: 

Railways that offer good connections help businesses to grow while pulling in more tourism. Our team at Microentityaccountants exists to address all your issues regarding VAT and train travel expenses, and tax regulations. Contact us today!

Which Types of Transport are Zero-Rated?

Domestic UK transport in vehicles, ships, or aircraft with a capacity of 10 or more passengers (including crew) is zero-rated.

• Trains

Standard fares, season tickets, and excursions.

• Eurostar

UK segments of international journeys.

• Public Transport

Buses, coaches, tubes, and trams.

• Special Cases

“Santa specials” or similar service, where transport is the main supply.

Is There VAT on Eurostar Train Travel?

Eurostar train travel within the UK is generally zero-rated for VAT. It means no VAT is charged on the ticket fare. Passenger transport services, including high-speed trains, are classified as zero-rated (not exempt), allowing operators to reclaim input VAT on expenses without charging VAT to passengers.

Get Expert Support For VAT on Train Travel

Avoid costly HMRC penalties by ensuring travel expenses and VAT returns are accurate. Mismanaging VAT on items such as VAT on train travel can cause unnecessary queries. If you are unsure about expense claims or VAT rules for micro-entities, then professional guidance can save you time and reduce risk. Speak to our experts at Micro Entity Accounts for more information and guidance about VAT on train travel!

The Bottom Line

In most cases, VAT on train travel is zero-rated in the UK. It means no VAT is charged on standard passenger rail fares. The most commonly asked questions, like “Is there VAT on train tickets?” and “Do train tickets have VAT?”, have the same answer: no VAT is charged, so there is nothing to reclaim. Understanding whether VAT on train travel is zero-rated or exempt is important. While the difference matters for VAT reporting, the takeaway is simple: train fares typically carry no VAT, and accuracy comes from knowing why. You can find additional information about VAT rules and their business implications through the selection of these informative articles:

• How to Find a VAT Number for a Company?
• Can You Pay VAT in Instalments? Everything You Need to Know
• Is There VAT on Used Cars? A Guide for UK Buyers
• Is There VAT on Car Parking? Find All the Details here

The content provided on Micro-Entity Accounts, including our blog and articles, is for general informational purposes only and does not constitute financial, accounting, or legal advice.