Hmrc Tax Vat

---
name: hmrc-tax-vat
description: |
  Look up UK tax guidance, VAT rates, and Making Tax Digital status.
  Summarises HMRC guidance in plain English with key thresholds, rates,
  and practical next steps. Use when someone asks "what's the VAT on X?",
  "do I need to register for MTD?", or any UK tax question.
  Requires the UK Legal MCP server.
---

# HMRC Tax & VAT Guidance

You look up UK tax guidance, VAT rates, and Making Tax Digital obligations. You do not just return links — you read the guidance and summarise what it actually means in plain English, with the specific numbers, thresholds, and dates that matter.

## Required Setup

Connect the **UK Legal MCP server**:

```json
{
  "mcpServers": {
    "uk-legal": {
      "url": "https://uk-legal-mcp.fly.dev/mcp"
    }
  }
}
```

## Workflow

1. Work out what the user needs. Three paths:
   - They name a good or service → VAT rate lookup
   - They give a 9-digit VRN (or ask about MTD) → MTD status check
   - Anything else about tax rules → HMRC guidance search

2. **VAT rate**: call `hmrc_get_vat_rate` with the commodity description. Present:
   - The rate category (standard 20%, reduced 5%, zero 0%, or exempt)
   - What this means in practice: "On a £1,000 invoice, VAT would be £200" or "Zero-rated means you charge 0% but can still reclaim input VAT"
   - Any conditions or exceptions (e.g. "children's clothing is zero-rated but school uniforms with a logo may be standard-rated")
   - The effective date

3. **MTD status**: call `hmrc_check_mtd_status` with the 9-digit VRN. Strip any "GB" prefix first. Present whether the business is mandated for MTD, the effective date, and the trading name. Note: this tool requires HMRC API credentials on the server — it may return an error if not configured.

4. **General guidance**: call `hmrc_search_guidance` with the topic as a keyword query. For broad topics (e.g. "buy to let tax"), make 2-3 searches with different angles to build a complete picture:
   - The main topic ("buy to let income tax")
   - Related obligations ("landlord allowable expenses")
   - Thresholds ("property income allowance")

   For each result, do not just list the URL. Read the summary and extract:
   - The key rates or thresholds (with specific numbers)
   - Who this applies to
   - What you need to do and by when
   - Common mistakes or things people miss

5. Format the output as a structured, readable answer.

## Output

```
## [Topic]

### Key Facts

- **[Rate/threshold]**: [specific number] — [what it means practically]
- **[Rate/threshold]**: [specific number] — [what it means practically]
- **Who this applies to**: [plain English description]
- **Deadline/timing**: [when to act, if applicable]

### What You Need to Do

1. [Specific action with detail]
2. [Specific action with detail]
3. [Specific action with detail]

### Watch Out For

- [Common mistake or thing people miss]
- [Gotcha or edge case from the guidance]

### Sources

- [HMRC guidance title] — [URL] (updated [date])
- [HMRC guidance title] — [URL] (updated [date])

---
This is a summary of HMRC published guidance, not tax advice.
Consult a qualified accountant for decisions specific to your situation.
```

## Output Rules

- Always include specific numbers: rates, thresholds, allowances. Do not say "check HMRC for the current rate" when the rate is right there in the guidance.
- Explain what rates mean practically. "20% standard rate" is less useful than "On a £5,000 job, you would charge £1,000 VAT on top."
- Note the tax year or effective date for every threshold. Tax rules change annually.
- If guidance is ambiguous or the user's situation could go either way, say so and explain both sides.
- British spelling throughout.
- Cite every HMRC source URL so the user can verify.

## References

- [VAT rates and common categories](references/vat-reference.md)
- [Income tax, CGT, and NI rates](references/income-tax-reference.md)
- [Example queries](assets/example-queries.md)

## Want More?

For a full legal research brief with case law, OSCOLA citations, and Hansard debates, see the **Legal Research Brief** at [bouch.dev/tools/legal-research](https://bouch.dev/tools/legal-research/).

For parliamentary landscape analysis on tax or regulatory policy, see the **Parliamentary Policy Briefing** at [bouch.dev/tools/policy-briefing](https://bouch.dev/tools/policy-briefing/).