diff --git a/app/models/registrar.rb b/app/models/registrar.rb
index 1d5c4eba3..87915e4ba 100644
--- a/app/models/registrar.rb
+++ b/app/models/registrar.rb
@@ -1,21 +1,3 @@
-class VATRateType < ActiveRecord::Type::Value
-  def type_cast_from_user(value)
-    if value.blank?
-      nil
-    else
-      super
-    end
-  end
-
-  def type_cast_from_database(value)
-    BigDecimal.new(value) * 100 if value
-  end
-
-  def type_cast_for_database(value)
-    BigDecimal.new(value) / 100 if value
-  end
-end
-
 class Registrar < ActiveRecord::Base
   include Versions # version/registrar_version.rb
 
@@ -35,13 +17,16 @@ class Registrar < ActiveRecord::Base
   validates :name, :reg_no, :reference_no, :code, uniqueness: true
   validates :accounting_customer_code, presence: true
   validates :language, presence: true
-  validates :vat_rate, :vat_no, absence: true, if: :local_vat_payer?
-  validates :vat_rate, presence: true, if: 'foreign_vat_payer? && vat_no.blank?'
+
+  validates :vat_rate, presence: true, if: :vat_rate_required?
+  validates :vat_rate, absence: true, if: :local_vat_payer?
   validates :vat_rate, absence: true, if: 'foreign_vat_payer? && vat_no?'
-  validates :vat_rate, numericality: { greater_than_or_equal_to: 0, less_than_or_equal_to: 99 }, allow_nil: true
+  validates :vat_rate, numericality: { greater_than_or_equal_to: 0, less_than_or_equal_to: 99.9 },
+            allow_nil: true
+
   validate :forbid_special_code
 
-  attribute :vat_rate, VATRateType.new
+  attribute :vat_rate, ::Type::VATRate.new
   after_initialize :set_defaults
   before_validation :generate_iso_11649_reference_no
 
@@ -216,4 +201,8 @@ class Registrar < ActiveRecord::Base
   def foreign_vat_payer?
     !local_vat_payer?
   end
+
+  def vat_rate_required?
+    foreign_vat_payer? && vat_no.blank?
+  end
 end
diff --git a/app/models/type/vat_rate.rb b/app/models/type/vat_rate.rb
new file mode 100644
index 000000000..466b076f8
--- /dev/null
+++ b/app/models/type/vat_rate.rb
@@ -0,0 +1,19 @@
+module Type
+  class VATRate < ActiveRecord::Type::Value
+    def type_cast_from_user(value)
+      if value.blank?
+        nil
+      else
+        super
+      end
+    end
+
+    def type_cast_from_database(value)
+      BigDecimal(value) * 100 if value
+    end
+
+    def type_cast_for_database(value)
+      BigDecimal(value) / 100.0 if value
+    end
+  end
+end
diff --git a/app/views/admin/registrars/_billing.html.erb b/app/views/admin/registrars/_billing.html.erb
index f3960233e..7ba778d08 100644
--- a/app/views/admin/registrars/_billing.html.erb
+++ b/app/views/admin/registrars/_billing.html.erb
@@ -7,6 +7,9 @@
             <dt><%= Registrar.human_attribute_name :vat_no %></dt>
             <dd><%= registrar.vat_no %></dd>
 
+            <dt><%= Registrar.human_attribute_name :vat_rate %></dt>
+            <dd><%= number_to_percentage registrar.vat_rate, precision: 1 %></dd>
+
             <dt><%= Registrar.human_attribute_name :accounting_customer_code %></dt>
             <dd><%= registrar.accounting_customer_code %></dd>
 
diff --git a/app/views/admin/registrars/form/_billing.html.erb b/app/views/admin/registrars/form/_billing.html.erb
index ff67232de..e644085cf 100644
--- a/app/views/admin/registrars/form/_billing.html.erb
+++ b/app/views/admin/registrars/form/_billing.html.erb
@@ -23,7 +23,8 @@
                     </div>
                     <div class="col-md-3">
                         <div class="input-group">
-                            <%= f.number_field :vat_rate, min: 0, max: 99, class: 'form-control' %>
+                            <%= f.number_field :vat_rate, min: 0, max: 99, step: 0.1,
+                                               class: 'form-control' %>
                             <div class="input-group-addon">%</div>
                         </div>
                     </div>
diff --git a/test/models/registrar/vat_test.rb b/test/models/registrar/vat_test.rb
new file mode 100644
index 000000000..cf36b6266
--- /dev/null
+++ b/test/models/registrar/vat_test.rb
@@ -0,0 +1,73 @@
+require 'test_helper'
+
+class RegistrarVATTest < ActiveSupport::TestCase
+  def setup
+    @registrar = registrars(:bestnames)
+  end
+
+  def test_optional_vat_no
+    @registrar.vat_no = ''
+    assert @registrar.valid?
+
+    @registrar.vat_no = 'any'
+    assert @registrar.valid?
+  end
+
+  def test_requires_vat_rate_when_registrar_is_foreign_vat_payer_and_vat_no_is_absent
+    @registrar.vat_no = ''
+
+    Registry.instance.stub(:legal_address_country, Country.new('GB')) do
+      @registrar.vat_rate = ''
+      assert @registrar.invalid?
+      assert @registrar.errors.added?(:vat_rate, :blank)
+
+      @registrar.vat_rate = -1
+      assert @registrar.invalid?
+
+      @registrar.vat_rate = 1
+      assert @registrar.valid?
+
+      @registrar.vat_rate = 99.9
+      assert @registrar.valid?
+
+      @registrar.vat_rate = 100
+      assert @registrar.invalid?
+    end
+  end
+
+  def test_vat_is_not_applied_when_registrar_is_local_vat_payer
+    @registrar.vat_rate = 1
+    assert @registrar.invalid?
+
+    @registrar.vat_rate = nil
+    assert @registrar.valid?
+  end
+
+  def test_vat_is_not_applied_when_registrar_is_foreign_vat_payer_and_vat_no_is_present
+    @registrar.vat_no = 'valid'
+
+    Registry.instance.stub(:legal_address_country, Country.new('GB')) do
+      @registrar.vat_rate = 1
+      assert @registrar.invalid?
+
+      @registrar.vat_rate = nil
+      assert @registrar.valid?
+    end
+  end
+
+  def test_serializes_and_deserializes_vat_rate
+    @registrar.vat_rate = '25.5'
+
+    Registry.instance.stub(:legal_address_country, Country.new('GB')) do
+      @registrar.save!
+    end
+
+    @registrar.reload
+    assert_equal 25.5, @registrar.vat_rate
+  end
+
+  def test_treats_empty_vat_rate_as_absent
+    @registrar.vat_rate = ''
+    assert_nil @registrar.vat_rate
+  end
+end