VAT Registration
VAT Registration
Find out when you need to register for VAT, how the £90,000 VAT threshold works and whether voluntary VAT registration could benefit your business.
A UK-established business must normally register when its taxable turnover exceeds £90,000 over a rolling 12-month period, or when it expects taxable turnover to exceed £90,000 in the next 30 days alone.
When Do You Need to Register for VAT?
You must normally register for VAT if your UK taxable turnover goes above £90,000 in any rolling 12-month period, or if you expect your taxable turnover to exceed £90,000 in the next 30 days alone.
The £90,000 VAT registration threshold applies to taxable turnover, not profit. Taxable turnover generally includes sales that are standard-rated, reduced-rated or zero-rated for VAT, but normally excludes VAT-exempt and genuinely outside-the-scope supplies.
Current UK threshold: £90,000 • Guide reviewed: October 2026
VAT Registration Explained
VAT registration is the process of registering a business with HM Revenue & Customs (HMRC) so that it can charge VAT on taxable sales, reclaim eligible VAT on business purchases and submit VAT returns.
Registration can be compulsory because your taxable turnover has exceeded the VAT threshold, or voluntary where your turnover remains below the threshold but registration makes commercial sense.
The rules apply to different types of business, including sole traders, limited companies and partnerships. The important figure is generally the taxable turnover of the person or entity carrying on the business — not the amount of profit it makes.
What Is the VAT Registration Threshold?
The UK VAT registration threshold is £90,000. A UK-established business must normally register if either of the following tests is met:
Rolling 12-month test
At the end of each month, calculate your taxable turnover for the previous 12 months. If the total has gone over £90,000, you normally become liable to register.
Next 30 days test
You must also register if, at any point, you expect your taxable turnover to go over £90,000 in the next 30 days alone.
A business can make very little profit and still need to register for VAT. It is the value of relevant taxable supplies that matters.
What Counts Towards the VAT Registration Threshold?
Your taxable turnover is broadly the total value of supplies you make in the course of business that are not exempt from VAT or outside the scope of UK VAT.
✓ Normally included
- Standard-rated sales
- Reduced-rate sales
- Zero-rated sales
- Certain goods hired or loaned to customers
- Certain business goods used privately
- Certain barter, part-exchange and gift transactions
- Some reverse-charge transactions
× Normally excluded
- VAT-exempt supplies
- Supplies genuinely outside the scope of UK VAT
- VAT itself
- Income that is not consideration for a business supply
VAT Registration Threshold Example
A growing consultancy
Imagine a consultancy checks its taxable sales at the end of September. Its turnover for the previous 12 months is:
Because its rolling 12-month taxable turnover has gone above £90,000, the business will normally have a compulsory VAT registration obligation.
When Do I Have to Register for VAT?
The registration deadline and your effective date of VAT registration depend on which test triggered the requirement.
| Reason for registration | When to notify HMRC | Effective registration date |
|---|---|---|
| Rolling 12-month turnover exceeds £90,000 | Within 30 days of the end of the month in which you exceeded the threshold | Normally the first day of the second month after the month in which the threshold was exceeded |
| Expect to exceed £90,000 in the next 30 days alone | By the end of that 30-day period | The date you first formed the expectation that the threshold would be exceeded |
| Voluntary registration | No compulsory threshold deadline | A permitted date agreed as part of the voluntary registration |
What If I Only Exceed the VAT Threshold Temporarily?
Going over £90,000 does not automatically mean HMRC will allow you to remain unregistered simply because the increase was unusual. However, in some circumstances you can apply for an exception from VAT registration.
Broadly, this may be possible where you became liable under the historic rolling 12-month test but can satisfy HMRC that your taxable supplies will not exceed the applicable VAT deregistration threshold during the following 12 months.
How to Register for VAT
Most businesses can register for VAT online through HMRC. An accountant or tax agent can also submit the VAT registration application on behalf of a business.
Check whether registration is required
Review your rolling 12-month taxable turnover and consider whether the 30-day forward-looking test applies.
Choose the correct registration date
Establish whether registration is compulsory or voluntary and identify the correct effective date.
Gather your information
HMRC may require business details, bank information, your UTR where applicable, annual turnover and an estimate of taxable turnover for the next 12 months.
Submit the VAT registration
Most applications are made using HMRC's online VAT registration service. Some specialist cases require additional information or alternative forms.
Receive your VAT registration details
Once registered, HMRC confirms your VAT registration number, effective date of registration and relevant VAT return information.
Should I Register for VAT Voluntarily?
You can normally apply for voluntary VAT registration even when your taxable turnover is below £90,000, provided the relevant conditions are met.
Whether voluntary registration is worthwhile depends on your customers, costs, pricing and the amount of VAT you expect to reclaim.
Potential advantages
- Reclaim eligible VAT on business purchases
- Potentially beneficial where customers are VAT registered
- Avoid a sudden registration change as turnover approaches £90,000
- May help some businesses present themselves as more established
- Potential recovery of qualifying pre-registration VAT
Potential disadvantages
- VAT may increase prices for customers who cannot reclaim it
- Additional bookkeeping and VAT return responsibilities
- Digital VAT records and compatible software are generally required
- Cash-flow implications if VAT is collected before customers pay
- Errors or missed deadlines can create penalties and interest
Who may benefit most from voluntary VAT registration?
Where customers are VAT registered and can generally recover the VAT charged, registration may have less impact on the effective customer cost.
Registration can potentially allow recovery of eligible input VAT on purchases and expenses.
Registering before turnover reaches £90,000 can avoid changing pricing and invoicing procedures shortly after launch.
Can You Reclaim VAT from Before VAT Registration?
Potentially, yes. Subject to HMRC's conditions, a newly VAT-registered business may be able to reclaim eligible VAT incurred before its effective registration date.
Potentially available for qualifying goods bought before registration, provided the relevant goods are still held and used for the registered business.
Potentially available for qualifying services received before registration where the conditions for recovery are satisfied.
Pre-registration VAT recovery is subject to detailed conditions, including how the goods or services are used and whether they relate to taxable business activities.
VAT Accounting Schemes After Registration
VAT registration and the VAT accounting scheme you use are separate decisions. Depending on eligibility and circumstances, businesses may use standard VAT accounting or one of several specialist schemes.
Standard VAT Accounting
VAT is generally accounted for using invoice dates, with eligible input VAT reclaimed on purchases.
Cash Accounting
Eligible businesses generally account for VAT when customers pay and reclaim VAT when suppliers are paid.
Flat Rate Scheme
Eligible smaller businesses calculate the VAT payable to HMRC using a sector-specific flat-rate percentage, subject to the scheme rules.
Annual Accounting
Eligible businesses make payments during the year and normally submit one VAT return for the annual accounting period.
Specialist schemes also exist for particular industries and transactions. Scheme eligibility and suitability should be checked against current HMRC rules before making a decision.
What Happens After VAT Registration?
Once VAT registered, your business takes on ongoing VAT responsibilities from its effective date of registration.
Charge VAT at the correct rate on taxable supplies
Issue valid VAT invoices where required
Keep appropriate VAT records
Use compatible software for Making Tax Digital for VAT, unless exempt
Submit VAT returns for each required VAT period
Pay VAT due to HMRC by the relevant deadline
Reclaim eligible input VAT on qualifying business costs
Keep monitoring eligibility for any VAT scheme being used
VAT-registered businesses are generally required to keep specified VAT records digitally and submit VAT returns using software compatible with Making Tax Digital, unless an exemption applies.
What Happens If You Register for VAT Late?
If you discover that your business should already have registered, deal with the position promptly. HMRC can normally register the business from the date it should originally have been registered.
This can mean accounting for VAT on taxable sales made from the correct effective date even where you did not charge customers VAT at the time. Depending on the circumstances, late registration can also lead to interest and penalties.
VAT Registration for Overseas Businesses
The £90,000 domestic registration threshold does not generally apply in the same way to a non-established taxable person.
A business with no UK establishment may have to register if it makes taxable supplies in the UK, or expects to make them in the next 30 days, regardless of their value. Cross-border VAT rules can be complex because the place-of-supply and reverse-charge rules may affect whether a UK taxable supply has actually been made.
Overseas businesses should therefore establish the VAT treatment of their supplies before assuming that the £90,000 threshold protects them from UK VAT registration.
Do I Need to Register for VAT?
Check taxable turnover for the previous rolling 12 months and expected taxable turnover in the next 30 days alone.
Over £90,000? → VAT registration is normally compulsory.The normal UK VAT registration threshold may not apply if you are a non-established taxable person making UK taxable supplies.
UK taxable supplies? → Check registration immediately.You may still choose voluntary VAT registration if it is commercially beneficial and you satisfy the registration conditions.
VAT Registration FAQs
What is the VAT registration threshold in the UK?
Is the VAT threshold based on turnover or profit?
Is the £90,000 VAT threshold based on the tax year?
Do zero-rated sales count towards the VAT threshold?
Do VAT-exempt sales count towards the registration threshold?
Can I register for VAT if my turnover is below £90,000?
Can a sole trader register for VAT?
When do I start charging VAT?
Can I reclaim VAT paid before registration?
Do overseas businesses have the £90,000 VAT threshold?
Not Sure Whether You Need to Register for VAT?
The Online Accountants can help you establish whether VAT registration is compulsory, consider whether voluntary registration makes sense and deal with your ongoing VAT accounting requirements.
About This VAT Registration Guide
This guide has been prepared by The Online Accountants, a UK online accountancy firm and ACCA member firm. It is designed to give business owners a practical overview of UK VAT registration rules.
Tax rules can change and individual circumstances differ. Check current HMRC guidance or obtain professional advice before acting on a VAT registration decision.