Amira grabs her coffee at London Euston and boards the 07:42 to Manchester Piccadilly. The return ticket cost £184.60, and she’ll do this twice this month — so rail alone is pushing £369.20 before she’s even bought lunch. Back at the office, she forwards the ticket confirmation to her bookkeeper and asks the question almost every VAT-registered business owner asks sooner or later: “Is there VAT on train tickets in the UK — and can I reclaim it?”
If you’ve ever stared at a rail receipt wondering why it shows no VAT, you’re not alone. In this guide you’ll learn (1) why most UK passenger rail fares are zero-rated, (2) how zero-rated differs from VAT-exempt (and why that difference matters), (3) when VAT crops up indirectly (especially when you recharge travel to clients), and (4) exactly what evidence to keep so your expenses file stands up to HMRC.
Quick Answer
Usually, no — UK train tickets don’t have VAT added because most public passenger transport in the UK is zero-rated for VAT. “Zero-rated” means the fare is a taxable supply at 0%, so the ticket price includes no VAT to reclaim. The legal basis sits in VAT Act 1994, Schedule 8, Group 8, with HMRC guidance in VAT Notice 744A.
Is there VAT on train tickets in the UK?
In most everyday cases — Advance, Off-Peak, Anytime, and season tickets for ordinary rail travel across places like Birmingham, Leeds, Cardiff, and Glasgow — the fare is treated as zero-rated passenger transport under UK VAT rules. HMRC’s passenger transport guidance explains the zero-rating position, and HMRC’s internal VAT Transport manual points directly to the legislation: VAT Act 1994, Schedule 8, Group 8 (Item 4) for passenger transport.
That’s why your rail ticket often doesn’t look like a “normal VAT receipt” — because there’s no VAT charged on the fare in the first place.
The rule properly explained
Passenger transport is generally zero-rated (0%) — the core rule
The UK zero rate covers transport of passengers that meets the conditions set out in the legislation and interpreted by HMRC. The key legal signpost is VAT Act 1994, Schedule 8, Group 8, Item 4 (transport of passengers). HMRC’s VAT Transport internal manual summarises that this is the law governing the zero rate for passenger transport.
HMRC also publishes practical guidance for businesses supplying or arranging passenger transport in VAT Notice 744A (including how passenger transport is treated and how “place of supply” works for international elements).
Zero-rated vs exempt — why the difference matters
People often say “VAT-free” as shorthand, but from an accounting and VAT-return point of view, zero-rated and exempt are not the same.
Here’s the clean comparison:
| VAT category | What it means | VAT charged to customer | Can you reclaim related input VAT? | Common examples |
| Zero-rated (0%) | A taxable supply taxed at 0% | No | Often yes, if the costs relate to taxable supplies | Most UK public passenger transport fares (incl. rail) (GOV.UK) |
| Exempt | A supply outside VAT charging (but still within VAT system) | No | Often no (can restrict VAT recovery) | Many financial services / insurance (varies) |
| Standard-rated (20%) | Normal VAT rate | Yes | Yes (subject to normal rules) | Most catering / many professional services |
Why you should care:
Zero-rated sales still count as taxable turnover for VAT purposes, whereas exempt income can limit VAT recovery under partial exemption rules. Train fares being zero-rated is one reason they sit in that “no VAT shown” bucket without automatically causing the complications you’d see with truly exempt supplies. (If you’re partially exempt, the detail can matter a lot.)
Accounting & expenses angle
How to record train tickets in your accounts
You don’t need brand-specific steps — the logic is the same in any ledger:
- Post the gross amount to a travel expense account
Use something like “Travel – Rail” (or “Travel & Subsistence – Rail”). - VAT code: choose a code that represents 0% / zero-rated / no VAT charged
What it’s not: it’s not a standard-rated purchase with reclaimable VAT, because the ticket has no input VAT on it. - Narrative: include the business context
Example: “Client meeting – Manchester – project kickoff”.
VAT return impact
- If the rail fare is zero-rated, there is no input VAT to reclaim because none is charged on the ticket.
- Depending on your bookkeeping setup, the purchase may still appear in VAT reports as a 0% purchase (or outside the VAT reclaim boxes), but the key outcome is the same: no VAT credit arises from the train fare itself.
Evidence to keep
For a clean audit trail, keep:
- Receipt/ticket confirmation (PDF, email, or screenshot)
- Itinerary/booking reference (especially for e-tickets)
- Business purpose note (one line is enough: who, where, why)
- If recharged: your client invoice and a note explaining whether you treated it as a disbursement or a recharge (more on this below)
Where people get caught out
1) Tom recharges a ticket to a client — and accidentally undercharges VAT
Tom, a VAT-registered IT consultant in Birmingham, buys a return rail ticket to Leeds for £86.40 to deliver on-site training. The ticket is zero-rated, so there’s no VAT on the fare.
He then invoices the client:
- “Travel to Leeds (rail) — £86.40”
What happens with VAT?
If Tom is simply recharging a cost as part of his consultancy service, HMRC normally treats this as part of the consideration for his main supply. That means the travel line follows the VAT liability of Tom’s service (often standard-rated). This is why “recharged expenses” commonly attract VAT even when the underlying cost didn’t. HMRC’s disbursement guidance draws a clear line between disbursements (as agent) and costs passed on as part of your supply.
A practical invoice line (recharge approach):
- Consultancy (2 days) — £1,200.00
- Travel (rail to Leeds) — £86.40
- VAT @ 20% — £257.28
- Total — £1,543.68
Here, VAT is charged because the travel is part of the taxable consultancy supply — not because the train operator charged VAT.
2) Same situation — but Priya treats it as a disbursement
Priya, a VAT-registered designer in London, is asked by her client to book a specific rail fare to Cardiff in the client’s name, with the client responsible for the cost. She pays it and plans to recover it at cost.
Ticket cost: £112.00.
If Priya can genuinely show she acted as the client’s agent and meets HMRC’s disbursement conditions, she may be able to treat it as a disbursement and keep it outside the scope of VAT on her invoice (meaning she doesn’t add VAT to that line). HMRC’s “costs or disbursements passed to customers” guidance sets out the conditions that must all apply.
Example invoice presentation (disbursement approach):
- Design services — £900.00
- Rail ticket to Cardiff (disbursement) — £112.00
- VAT @ 20% on design services — £180.00
- Total — £1,192.00
Key point: Calling something a disbursement doesn’t make it one. If Priya booked the ticket as a normal business expense and is just “passing it on”, that’s typically a recharge, not a disbursement. HMRC’s broader VAT guidance includes examples showing why certain third-party payments cannot be treated as disbursements when they’re really part of the supplier’s own cost base.
3) Commuting vs business travel — Sophie’s season ticket isn’t automatically a business expense
Sophie runs a small VAT-registered marketing agency. She buys a monthly season ticket from the Manchester suburbs into the city centre for £238.00.
- If this is ordinary home-to-regular-workplace commuting, it’s generally not a business travel expense for tax purposes (even though it’s a real cost).
- If Sophie is travelling to a temporary workplace (for example, a client site in Edinburgh for a short project), that travel is more likely to be treated as business travel.
VAT angle: whichever way it falls for expense policy, the fare itself is still generally zero-rated, meaning no input VAT to reclaim on the ticket.
4) “Rail + hospitality” packages — Jack finds VAT hiding in the extras
Jack takes a client to a match in Glasgow and buys a package: heritage rail journey + hospitality, total £160.00 for two people. He assumes “train = zero VAT”, posts it all to zero-rated travel, and moves on.
But HMRC’s internal guidance on railway trips notes that where rail travel is provided with facilities such as catering or entertainment, you need to consider the correct VAT liability using the same principles applied to similar mixed supplies. In plain terms: the VAT may sit in the hospitality element, not the transport element.
Practical outcome:
- The transport fare may be zero-rated
- The catering/entertainment element can be treated differently (often standard-rated), depending on how the package is structured and priced
5) International segments — Hannah’s UK–Europe trip isn’t one simple VAT answer
Hannah travels from London to Paris for a conference, paying £210.00 for the journey.
For international passenger transport, VAT can depend on where the transport takes place (the “place of supply” concept). HMRC’s passenger transport notice covers place-of-supply rules, and HMRC’s internal manual on passenger transport place of supply explains the basic principle: passenger transport is supplied where it takes place, and UK passenger transport within the UK can be zero-rated, while transport outside the UK can be outside the scope of UK VAT.
High-level takeaway: don’t assume every cross-border ticket behaves like a UK-only rail fare. The VAT treatment can change once travel occurs outside the UK.
When VAT applies indirectly: recharges vs disbursements
This is the bit that trips up otherwise careful businesses.
Recharged expenses: VAT follows your main supply
If you incur travel as part of delivering your service, and you invoice the customer for it, HMRC will often see that as part of your overall supply — meaning you charge VAT at the rate that applies to your service (often 20%), even if the cost you incurred was zero-rated. HMRC guidance on disbursements vs costs passed on supports this distinction.
True disbursements: outside the scope of VAT — but only if conditions are met
A disbursement is effectively you paying something as an agent for your client, where the client is the real recipient of the supply and would have paid it themselves. HMRC’s guidance lists the conditions you must meet to treat it as a disbursement and exclude it from VAT calculations.
A simple way to pressure-test it:
- Was the ticket really bought on behalf of the client, for the client to use, with the client responsible for the cost?
- Or was it bought for you/your staff to perform your service?
Most rail travel for client work is the second one — a recharge, not a disbursement.
Mixed tickets and add-ons: where VAT may appear
Train fares are often zero-rated, but travel days include extras that aren’t.
On-board food, drink, and lounge access
Food/drink sold as catering is commonly standard-rated (20%) in many everyday scenarios. So while your £92.50 train fare may be zero-rated, the £8.20 lunch and £3.10 coffee may carry VAT (depending on what you bought and how it’s supplied). If you’re doing expense claims, it’s normal to see VAT on the catering line but not on the ticket. (General VAT treatment of catering and mixed supplies is also a common theme in practical VAT guidance.)
Railcards and booking/administration fees
Where a charge is for a separate service (for example, an admin fee charged by a third-party agent), the VAT liability can differ from the fare itself. If you book through an agent, keep the agent’s invoice and look at what’s being supplied (the ticket, the arranging service, or both).
HMRC’s internal manual also notes specific rules about agents making arrangements for passenger transport under Schedule 8 Group 8.
What evidence to keep
Aim for “would this make sense to someone who wasn’t there?”
Minimum pack for each journey:
- Ticket/receipt (PDF/email)
- Proof of travel date and route (itinerary, booking reference)
- Short note: “Meeting with BlueForge Ltd at Leeds station office – project review”
- If recharged: client invoice showing how you treated the cost (recharge vs disbursement), plus supporting explanation
If you have staff expenses, add:
- Expense claim form/approval record
- Policy reference (e.g., standard class unless approved)
FAQ
Can I reclaim VAT on train tickets?
Usually no, because most UK train fares are zero-rated, meaning no VAT is charged on the ticket in the first place. If no VAT is charged, there’s no input VAT to reclaim. Keep the ticket as evidence of the business cost regardless.
Is rail travel VAT exempt or zero-rated?
For most public passenger rail travel in the UK, it’s zero-rated, not exempt. Zero-rated supplies are still taxable supplies at 0%, which is different from exemption in how VAT reporting and recovery can work. HMRC links the zero rate to VAT Act 1994 Schedule 8 Group 8 and explains it in VAT Notice 744A.
Do I add VAT when I invoice a client for travel?
Often yes, if the travel is a recharged expense that forms part of your own taxable service (for example, consultancy). In that case, VAT usually follows the liability of your main supply. If it’s a genuine disbursement (you acted as the client’s agent and meet HMRC’s conditions), it may be outside the scope of VAT on your invoice.
What’s the difference between a recharge and a disbursement?
A recharge is you passing on your own business costs — it’s typically part of your supply and can attract VAT accordingly. A disbursement is a payment you make as agent for your client, where your client is the real recipient of the supply, and HMRC lists strict conditions you must meet. If you miss a condition, it’s not a disbursement.
Do season tickets have VAT?
Season tickets are typically treated the same way as other public passenger rail fares: generally zero-rated, so no VAT is added to the fare. That means there’s usually no VAT to reclaim on the season ticket purchase.
What evidence do I need for HMRC?
Keep the ticket/receipt, booking confirmation, date/route details, and a short business purpose note. If you recharge it to a client, keep the client’s invoice and show whether you treated it as a recharge or a disbursement (and why). This creates a clear “story” from purchase to accounting entry to invoicing.
If the ticket shows “VAT 0.00”, does that mean it’s zero-rated?
Often yes — it usually indicates the fare is VAT-rated at 0% rather than standard-rated. The practical result is the same: you paid no VAT on the fare. The safest approach is to treat it as 0% / zero-rated passenger transport unless the documentation indicates otherwise.
What about taxis and minicabs?
Taxis/minicabs are not automatically zero-rated like public passenger rail fares. Many rides can be standard-rated if the supplier is VAT-registered and the supply is taxable; but VAT treatment can vary depending on the operator and how the journey is supplied. Always check the receipt: if VAT is charged, it should be shown.
What about international train travel — is VAT still zero-rated?
International passenger transport can involve place of supply rules: VAT may depend on where the transport takes place. HMRC’s passenger transport guidance explains these principles, and HMRC manuals outline that UK passenger transport in the UK can be zero-rated, while transport outside the UK may be outside the scope of UK VAT. Keep the itinerary showing which legs occur in which country.
If I buy rail tickets through an agent or booking platform, does VAT change?
Sometimes the platform charges a separate fee for “arranging” the transport, and that fee can have its own VAT treatment. HMRC also has rules about the “making of arrangements” for passenger transport within Schedule 8 Group 8. Review the invoice lines carefully so you don’t treat a standard-rated fee as part of a zero-rated fare.
Are rail trips with meals or entertainment still zero-rated?
Not always as a single bundle. HMRC’s internal guidance notes that railway trips supplied with catering or entertainment need careful analysis using mixed-supply principles. In practice, the ticket element may be zero-rated but the catering/entertainment element may not be.
Conclusion
So, is there VAT on train tickets in the UK? In most day-to-day cases, no — because public passenger rail fares are generally zero-rated, backed by VAT Act 1994 Schedule 8 Group 8 and explained in HMRC VAT Notice 744A.
Practically, that means your ticket won’t include VAT, and there’s no input VAT to reclaim on the fare. The bigger trap is what happens after you travel: if you recharge the cost to a client, you may need to add VAT depending on whether it’s a recharge or a true disbursement. If you’re unsure, it’s worth checking with your accountant — or reading another BloomFinancials guide on recharged expenses and VAT.
