The short answer
a UK business must register for VAT if its taxable turnover has gone over £90,000 in any rolling 12-month period, or if it expects to go over £90,000 in the next 30 days alone. You can also register voluntarily below the threshold. After registering you charge VAT on taxable sales, can reclaim VAT on business costs and file VAT returns, normally every quarter.
Checked 23 October 2026. Rates for 2026/27.Key takeaways
- The registration threshold is £90,000 and the deregistration threshold is £88,000.
- The test is rolling, not by tax year. Check your turnover every month.
- You must register within 30 days of the end of the month in which you exceed the threshold.
- Voluntary registration can help if your customers are VAT-registered businesses.
- VAT returns and payments are due one month and seven days after the period ends.
The two registration tests
The historic test
At the end of every month, add up your taxable turnover for the previous 12 months. If it is more than £90,000, you must register. You then have 30 days from the end of that month to notify HMRC, and your registration takes effect from the first day of the second month after you went over, or an earlier date agreed with HMRC.
The future test
You must also register if you expect your taxable turnover to exceed £90,000 in a single 30-day period. For example, a large one-off contract could trigger this. In this case you must register by the end of that 30-day period, and your registration takes effect from the date you realised.
What counts as taxable turnover?
Taxable turnover includes sales of standard-rated, reduced-rated and zero-rated goods and services. It excludes VAT-exempt supplies and sales outside the scope of UK VAT. The sale of capital assets generally does not count. If you are unsure how a sale is treated, check before the threshold nears.
Should you register before you have to?
Voluntary registration lets you reclaim VAT on costs. That is useful if you sell mostly to other VAT-registered businesses, because they can reclaim the VAT you add, so it does not hurt your pricing. It is less attractive if you sell mainly to consumers or exempt customers, where adding VAT makes you more expensive or lowers your margin. Registration also adds admin, so weigh the benefits. Our VAT registration Q&A has a quick answer.
VAT rates in 2026/27
- Standard rate: 20%, the default.
- Reduced rate: 5% for items such as domestic energy.
- Zero rate: 0% for items such as most food and children’s clothes, but these still count as taxable turnover.
- Exempt: items such as insurance and certain education, which do not count as taxable turnover.
VAT schemes that can help small companies
The Flat Rate Scheme lets you pay a fixed percentage of gross turnover instead of working out VAT on every purchase. It is available if you expect taxable turnover of £150,000 or less, excluding VAT. The Cash Accounting Scheme lets you account for VAT when money changes hands, which is useful if customers pay late. The Annual Accounting Scheme reduces the number of returns to one a year with advance payments. Read whether the flat rate scheme is worth it before you choose, because the limited cost trader rate of 16.5% can remove the benefit.
How to register
- Create a Government Gateway login for the company if you do not have one.
- Register for VAT online with HMRC, giving your turnover and business details.
- Receive your VAT number and the date your registration starts.
- Set up Making Tax Digital compatible software and sign up for MTD for VAT.
- Add the VAT number and VAT to your invoices from the registration date.
See our VAT returns service if you would rather have this handled.
VAT returns, deadlines and penalties
Most companies file quarterly returns. The return and any payment are due one month and seven days after the end of the VAT period. You must file digital returns through software under Making Tax Digital for VAT. HMRC uses a points-based penalty system for late returns, and late payment interest and penalties apply. Our guide to Making Tax Digital for VAT covers it in more detail. Test your VAT sums with the VAT calculator.
Common VAT registration mistakes
- Waiting until the end of the tax year to check turnover.
- Forgetting that the threshold looks at the previous 12 months, not 12 months within a tax year.
- Charging VAT before the registration date.
- Not registering because turnover includes one-off income.
- Not keeping digital VAT records as required.
Leaving the VAT system
If your taxable turnover falls to £88,000 or less and is expected to stay there, you can ask to deregister. HMRC may also require you to account for VAT on stock and assets you still hold. See the VAT deregistration threshold.
How to monitor your turnover
The easiest way to avoid missing the VAT threshold is to track a rolling 12-month total each month. Add the latest month’s taxable sales and remove the same month from a year ago. Many accounting packages can run this as a report. Set an alert at around 80% of the threshold, which is £72,000, so you have time to prepare. If a large contract is coming, check the 30-day rule as well, since a single big invoice can trigger registration immediately.
What changes after you register?
Once you are registered, you must add VAT to taxable sales, show your VAT number on invoices and keep digital records. You can reclaim VAT paid on business purchases, which can improve cash flow if you have significant costs. You will also need to submit regular returns and pay what you owe. Pricing needs attention: if your customers are consumers, a 20% VAT charge may need to come out of your margin if you do not want to raise prices. Think about this before you cross the threshold.
Special cases
Overseas sellers with no UK establishment must register for VAT from the first sale in the UK, with no threshold. Businesses that import goods may be affected by postponed VAT accounting. If you sell digital services to consumers, place of supply rules can change where VAT is due. Charities, landlords with exempt rental income and healthcare providers have their own rules. If any of these apply, take advice before relying on the standard threshold.
The bottom line
You must register when taxable turnover passes £90,000 in any rolling 12 months, or you expect it to in the next 30 days. Track your rolling total each month and register on time to avoid penalties.
Frequently asked questions
What is the VAT registration threshold?
£90,000 of taxable turnover in any rolling 12 months. The deregistration threshold is £88,000.
How long do I have to register for VAT?
You must notify HMRC within 30 days of the end of the month in which you went over the threshold.
Can I register for VAT voluntarily?
Yes, at any turnover. It can help you reclaim VAT if your customers are VAT-registered businesses.
What happens if I register late?
HMRC can charge a penalty and require VAT from the date you should have registered, even if you did not charge it to customers.
How often do I file VAT returns?
Normally every three months, one month and seven days after the end of each period.
This article is general information, not personal tax or financial advice. Rules and rates change, so check GOV.UK or speak to an accountant about your circumstances. Rates shown are for 2026/27, last checked November 2026.