At my work, I am required to follow the house style for indentation, which goes as follows:
To insert space characters whenever the tab key is pressed, set the 'expandtab' option:
:set expandtab
Next step is to control the number of space characters that will be inserted when the tab key is pressed, set the 'tabstop' option. For example, to insert 2 space for a tab, use:
:set tabstop=2
ref: http://vim.wikia.com/wiki/Converting_tabs_to_spaces