There is 0% VAT on train tickets in the UK. It means you do not pay VAT on the ticket price. Since no VAT is charged, there is normally no VAT to reclaim on the cost of the ticket.
HMRC treats qualifying passenger transport differently from many other business expenses. Understanding these rules helps businesses keep accurate VAT records while avoiding incorrect VAT reclaims. Let us break down everything you need to know about VAT on train tickets for the 2026/27 UK tax year.
Is There VAT on Train Tickets?
In the UK, train tickets are subject to VAT, but with some exceptions. Passenger transport services, including train tickets, are generally exempt from VAT. However, this exemption only applies to the fare portion of the ticket price. Any additional services or amenities, such as food, drinks, or seat reservations, may be subject to VAT.
Do You Pay VAT on Train Tickets in the UK?
No. You do not pay VAT on train tickets. This rule remains the same whether you’re buying a single, a return, a season ticket, or even a first class upgrade. Yes, in all these cases there is just no VAT on train tickets. This is due to the specific UK law.
Under Schedule 8, Group 8 of the VAT Act 1994, transporting passengers in any vehicle which is designed to carry ten or more people is zero-rated. Trains obviously tick that box. And so do buses, coaches, and the London Underground.
But you must know that zero-rated is not the same thing as VAT exempt. They look identical in a way that you pay no VAT either way. But behind the scenes they work very differently.
How Much VAT is Charged on Train Tickets?
The good news is that the majority of train tickets in the UK are exempt from VAT. However, if you purchase additional services or amenities, you may be charged VAT at the standard rate of 20%. For example, if you buy a sandwich or a drink on a train, you will pay VAT. There are some exceptions and special cases to be aware of:
- Season tickets: These are exempt from VAT.
- Advance tickets: These are also exempt from VAT.
- First-class tickets: These may be subject to VAT on the upgrade portion of the ticket price.
- Special services: Such as catering or sleeping berths, may be subject to VAT.
UK train tickets are generally exempt from VAT, but additional services and amenities may be subject to the standard 20% VAT rate. Understanding what you’re paying for and what VAT charges apply to your train travel is essential.
Zero-Rated vs VAT Exempt: Why the Difference Matters?
Zero-rated means the sale is technically a taxable supply, just taxed at 0%. Because of that, train operators can fully reclaim the VAT they pay on massive business expenses, such as equipment, infrastructure charges, and new trains.
If VAT on train tickets were exempt, train companies could not recover this tax. Also, they might have passed the cost onto you through higher fares.
For you as a passenger or a business buying tickets, the price you see is exactly what you pay. There is 0% VAT on train tickets. As a result, you never pay extra tax for the train journey itself.
Why Are Train Tickets Zero-Rated?
VAT on train tickets is zero-rated because UK governments have treated qualifying passenger transport as an essential public service. Zero-rated VAT on train tickets helps keep the cost of public transport down. Also, by applying a 0% VAT on train tickets, the UK Government has historically applied this treatment to support public transport.
Can I Claim Train Tickets as a Business Expense?
Yes, definitely. You can claim train tickets as a business expense. A lot of business owners think that because there is no VAT on train tickets, they cannot use them to lower their overall tax burden. This is a big misconception.
The lack of a VAT reclaim has nothing to do with your annual direct taxes. When you or your employees travel by train for work purposes, the entire cost of that ticket is a valid business deduction.
But remember that HMRC has strict guidelines on what qualifies. In order to claim a train journey as an allowable business expense, you must meet two main conditions:
- The journey must be “wholly and exclusively” for business purposes.
- You must keep proof of the purchase.
Journeys that are mainly personal do not qualify.
How to Record Train Travel on Your VAT Return?
Even though VAT on train tickets is generally charged at 0%, you still have to report these zero-rated purchases to HMRC. Yes, if you are a VAT-registered business. You cannot just leave them off your quarterly VAT return.
When you or your bookkeeper fill out your quarterly digital return, make sure to include the zero-rated travel expenses in specific boxes:
- Box 4 (VAT reclaimed on purchases): Enter £0.00. Since no tax was charged on the train ticket, there is no input tax to reclaim here.
- Box 7 (Total value of purchases excluding VAT): Enter the full net cost of the ticket. For example, if you paid £120 for a rail fare, the full £120 must be included in Box 7 along with your other business expenses.
It is a very common bookkeeping slip-up to leave zero-rated purchases out of Box 7. Yes, it will not change the amount of tax you owe right now. But due to this mistake, your total purchase figures will be underreported to HMRC. This will result in inaccurate digital records on your VAT return.
Taxis and Buses: Are They Also Zero-Rated?
Not always. In fact, this is another area where businesses become confused because different forms of transport follow different VAT rules.
Is There VAT on Bus Tickets?
No. Bus tickets follow the exact same principle as VAT on train tickets. They are zero-rated for VAT. This is because these vehicles are designed to carry large numbers of passengers. This means you do not pay tax on your ticket. And since you do not pay tax on the tickets, your business cannot claim any tax back on employee bus commutes or business trips.
Is There VAT on Taxi Fares?
It depends on the taxi operator. A taxi company that is VAT registered may charge VAT on its fares. But if the operator is not VAT registered, VAT will not be added.
This means two journeys that cost the same amount could have different VAT treatment. It just depends on who provides the service.
- Independent Drivers: Many local and single-driver taxi operators earn under the £90,000 compulsory threshold, meaning they may be unregistered. If they are not registered, they cannot legally charge you VAT.
- Large Firms and Apps: Corporate cab companies and national apps like Uber are generally VAT-registered. These platforms must charge the standard 20% tax on their UK rides.
If you get a proper taxi receipt that explicitly shows a VAT registration number and a breakdown of the 20% tax, you can absolutely claim that amount back on your business return. To reclaim VAT, you should obtain a valid VAT invoice where required. Simplified VAT invoices may be used for eligible transactions of £250 or less.
Do International Train Journeys Like The Eurostar Include VAT?
No. International train travel that starts in the UK is also zero-rated for VAT. Passenger transport that moves across international borders is kept free of domestic VAT. This is under global transit agreements. The portion of the journey inside the UK is zero-rated. International passenger transport is generally zero-rated under UK VAT legislation.
How Should I Record A Train Ticket If I Am On The VAT Flat Rate Scheme?
If your business uses the Flat Rate Scheme, you cannot claim back individual VAT on your day-to-day purchases. Additionally, while you cannot reclaim the tax, you must still include the net cost of zero-rated travel expenses like train tickets in Box 7 (Total value of purchases) on your VAT return. Instead, you simply record the gross cost inside your company’s primary accounting software as a standard business deduction. This ensures the expense still correctly reduces your overall business profit for your annual income tax or corporation tax calculations.
What Happens If An Employee Loses Their Digital Train Ticket?
If an employee loses a ticket, it’s better to try to retrieve a digital copy or an email confirmation from the booking app. If you only have a bank transaction record, you can still log the cost as a business expense. But doing this too often can raise questions during an HMRC review. Therefore, it is always safest to enforce a company policy of saving digital PDF receipts immediately.
How Do VAT Refunds Work for Travel Expenses?
When travelling in the UK, you may be eligible for a Value Added Tax refund on certain travel expenses. VAT is a consumption tax charged on goods and services, and in some cases, you can claim a refund on the VAT paid. The following travel expenses may be eligible for a VAT refund:
- Hotel stays
- Restaurant meals
- Car rentals
- Fuel purchases
- Train tickets (first-class only)
How to Claim a VAT Refund?
To claim a VAT refund, follow these steps:
- Ensure the supplier is VAT-registered
- Request a VAT receipt or invoice
- Check the receipt for the VAT amount
- Claim the refund through the supplier or a refund agent
The refund process typically involves:
- Submitting the VAT receipt and claim form
- Waiting for approval (usually within a few weeks)
- Receiving the refund in cash or credit
VAT refunds can help travellers recover some of the taxes paid on eligible expenses in the UK. It is important to understand which expenses qualify, how to claim a refund and the refund process. You can maximise your savings and make the most of your travel budget.
How to Account for VAT?
If your business turnover exceeds the VAT threshold, you must register for VAT. You can also voluntarily register if your turnover is below the threshold. To calculate VAT, follow these steps:
- Determine the VAT rate (standard 20%, reduced 5%, or zero-rated)
- Calculate the VAT amount (price x VAT rate)
- Add VAT to the invoice or receipt
When selling goods or services, charge VAT to your customers by:
- Adding VAT to the sale price
- Issuing a VAT invoice or receipt
- Paying the collected VAT to HMRC
When buying goods or services, claim VAT back by:
- Ensuring the supplier is VAT-registered
- Obtaining a VAT invoice or receipt
- Claiming the VAT amount on your VAT return
Submit VAT returns to HMRC quarterly or annually, depending on your business needs. The return should include:
- Total VAT sales
- Total VAT purchases
- Net VAT due or refundable
Pay the net VAT due to HMRC by the deadline or claim a refund if you’ve overpaid. Keep accurate VAT records for at least 6 years, including:
- Invoices and receipts
- VAT returns
- Calculation documents
HMRC may audit your records, to ensure accuracy and compliance.
The Bottom Line
The VAT on train tickets in the UK remains zero-rated in 2026/27. That means no VAT is charged, and businesses cannot reclaim VAT on them.
But that does not mean the expense is unimportant.
Train travel is still a valid business expense, and receipts should be kept for accounting records.
How Accotax Can Help
At Accotax, we help businesses apply the correct VAT treatment, maintain accurate bookkeeping, and prepare compliant VAT returns.
We make sure every expense is recorded properly, keeping your tax bill as low as legally possible. Reach out to us today to see how we can take the stress out of your company finances.
Disclaimer: All the information provided in this article on “VAT on train tickets“, including all the texts and graphics, is general in nature. It does not intend to disregard any of the professional advice.
