Value Added Tax (VAT) is a consumption tax that is added to the price of certain goods and services in many countries, including the United Kingdom.

Certain goods and services are exempt from VAT or are subject to reduced rates. VAT-exempt items include:

• Most food items and some agricultural products
• Books, newspapers, and certain publications
• Medical equipment and certain medical services
• Children's clothing and footwear
• Transport services
• Some exports and international services
• Financial and insurance services

For the goods and services that are subject to the reduced rate it's typically 5% instead of the standard 20%.

It's important to note that businesses selling VAT-exempt items or services do not have to charge VAT to their customers, but they are also not allowed to claim back the VAT that they paid on their own costs. This can make it less profitable for them, and therefore it could also affect the prices of these goods and services.

It's also important to note that the list of items that are VAT-exempt or subject to reduced rates can change over time, depending on the country's fiscal policies and economic conditions. It's essential to consult with a tax professional or check the local laws and regulations to ensure you are aware of the VAT treatment of the specific good or service you are providing.