When do I have to register for VAT in the UK?

GuideUKChecked 30 October 202614 primary sources8 min readUS version

The short answer

In the UK you must register for VAT when your VAT-taxable turnover for the last 12 months goes over £90,000 at the end of any month, or when you expect it to go over £90,000 in the next 30 days alone. Either way, you then have 30 days to tell HMRC (As of Oct 2026).

What counts towards the £90,000?

Your VAT-taxable turnover: your sales that are not exempt, zero-rated ones included. It is turnover, not profit, and the test runs on any rolling 12 months, not your accounting year.

  • Sales at 20%, 5% and 0% all count; exempt sales do not.
  • Count before costs: £95,000 of sales in 12 months with £60,000 of costs is over the threshold.
  • Splitting one business into several to stay under it does not work: HMRC can direct that they are treated as one taxable person (VAT Act 1994 Sch 1 paras 1A and 2).
  • A business not established in the UK has no threshold and registers from its first UK taxable supply (Sch 1A).

How does the rolling 12-month test work?

At the end of every month, add up your taxable turnover for the 12 months just ended. If it is over £90,000, tell HMRC within 30 days of that month end; you are registered, and must charge VAT, from the first day of the second month after it (Sch 1 paras 1(1)(a) and 5).

A seasonal business (indicative, As of Oct 2026)Amount or date
Taxable turnover, 12 months to 31 July 2026£87,300
Plus August 2026 sales£8,100
Less August 2025 sales, now outside the 12 months£5,200
Taxable turnover, 12 months to 31 August 2026£90,200: over £90,000
Tell HMRC by30 September 2026
Registered, and charging VAT, from1 October 2026

One strong month can tip you over, so run the sum at every month end. The Academy lesson for landscapers works a seasonal case.

What is the 30-day forward look?

A second test, for a sudden jump. If you expect taxable turnover in the next 30 days alone to go over £90,000, you must tell HMRC within those 30 days, and you are registered from the start of them (Sch 1 paras 1(1)(b) and 6).

A typical trigger is one large contract, say £95,000 to be invoiced within the month. Check this test whenever a big order lands, as well as the 12-month test at each month end.

What if I register late?

You owe VAT from the date you should have been registered, often out of money you have already banked, and HMRC can add a penalty.

  • HMRC treats the prices you charged as including VAT (VAT Act 1994 s.19(2)): on £30,000 of standard-rated sales, £5,000 (one sixth) is VAT you owe (indicative).
  • A failure to notify penalty can reach 30% of the VAT lost where the failure was not deliberate, reduced if you tell HMRC yourself (Finance Act 2008 Sch 41).
  • HMRC can normally assess 4 years back, and up to 20 years where the loss came from not notifying liability to register (VAT Act 1994 s.77).

If you think you should already be registered, register now and have an accountant work out the backdated VAT.

Can I register before I reach the threshold?

Yes, you can register voluntarily. It can suit a business whose customers are mostly VAT-registered, because they reclaim the VAT you charge while you reclaim the VAT on your own costs.

If you sell mainly to consumers, VAT either goes on your prices or comes out of your margin, so work out both before you decide.

Which VAT schemes help a small business?

Three schemes are built for smaller firms, each with its own turnover limits (As of Oct 2026):

SchemeHow it worksJoin ifLeave when
Flat RatePay a fixed percentage of VAT-inclusive turnover, set by your tradeExpected taxable turnover for the next 12 months is £150,000 or less, excluding VATNormally at the anniversary if VAT-inclusive income for the year was over £230,000
Cash AccountingVAT on your sales is due when customers pay you, not when you invoiceExpected taxable turnover up to £1.35 millionOver £1.6 million
Annual AccountingOne return a year, with 9 monthly or 3 quarterly payments towards itTaxable turnover up to £1.35 millionOver £1.6 million

On the Flat Rate Scheme you also leave from the start of any 30 days expected to bring in more than £230,000 on their own, and HMRC can let you stay after a one-off rise if next year's income will not exceed £191,500. Every flat rate is 1 percentage point lower in your first year of VAT registration.

A business that buys few goods pays the limited cost rate of 16.5% if its relevant goods cost less than 2% of VAT-inclusive turnover, or less than £1,000 a year. For a labour-only firm that can cost more than normal accounting:

Cleaning firm, £60,000 a year before VAT (indicative, As of Oct 2026)VAT paid
Flat Rate Scheme: 16.5% of £72,000 VAT-inclusive turnover£11,880
Normal accounting: £12,000 output VAT less £1,500 input VAT£10,500
Extra cost of the scheme£1,380

See the Academy lesson on the scheme that costs cleaners more, and ask an accountant before joining or leaving any scheme.

What does Making Tax Digital mean for VAT?

Every VAT-registered business must keep digital records and send its VAT returns through compatible software (VAT Notice 700/22).

Most file quarterly, with return and payment due 1 month and 7 days after the period ends: 7 November for the quarter to 30 September. Each late return earns a penalty point, with £200 at 4 points for quarterly filers. VAT paid 16 to 30 days late costs 3% of the VAT owed at day 15; paid later, add 3% of the VAT owed at day 30 and a daily penalty at 10% a year, plus interest (As of Oct 2026).

When can I deregister?

When you expect taxable turnover in the next 12 months not to exceed £88,000, you can ask HMRC to cancel your registration (Sch 1 para 4, As of Oct 2026). If you close the business, deregister as part of closing it.

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Questions owners ask

What is the VAT registration threshold in the UK?

£90,000 of VAT-taxable turnover in any rolling 12 months, the figure since 1 April 2024. The deregistration threshold is £88,000. As of Oct 2026.

Is the VAT threshold based on turnover or profit?

Turnover. Every taxable sale counts before costs, zero-rated sales included; exempt sales do not. The test is any rolling 12 months, not your accounting year.

How long do I have to register for VAT?

Under the 12-month test, 30 days from the end of the month your turnover went over £90,000, and you are registered from the first day of the second month after it. Under the 30-day test, by the end of those 30 days. As of Oct 2026.

What happens if I register for VAT late?

You owe VAT from the date you should have been registered, and HMRC can charge a failure to notify penalty of up to 30% of the VAT lost where the failure was not deliberate, less if you tell HMRC yourself (Finance Act 2008 Sch 41).

Can I use the VAT Flat Rate Scheme?

If you expect taxable turnover of £150,000 or less, excluding VAT, in the next 12 months. A labour-only business usually pays the 16.5% limited cost rate, which can cost more than normal VAT accounting. As of Oct 2026.

Should I see an accountant about VAT registration?

Yes, if you are close to the threshold, sell a mix of standard-rated, zero-rated and exempt items, are choosing a scheme or think you should already be registered.

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