The VAT registration threshold, and when you must register
The UK VAT registration threshold is £90,000. You must register once your VAT-taxable turnover goes over £90,000 in any rolling 12-month period, or if you expect to cross it in the next 30 days on its own. Cross the line and you have 30 days to register. Register late and HMRC can backdate it, which usually means paying VAT you never charged.
Reviewed July 2026. Figures are correct at the date of review. Always check GOV.UK for the latest.
The bit that catches people out: “rolling”, not your tax year
Here is the trap. The £90,000 test isn’t measured against your accounting year. It’s any run of 12 consecutive months. So an electrician who has a quiet spring but a flat-out autumn can tip over the line in October, not at their year-end. If you only check your figure once a year, you can be legally late without ever realising. The fix is simple: keep an eye on your rolling 12-month total, not just your annual accounts.
The “next 30 days” rule
There’s a second trigger that surprises people. If you expect your VAT-taxable turnover to go over £90,000 in the next 30 days alone (say you win one big contract), you have to register straight away, based on the expectation, before the money even lands.
What counts towards the threshold
It’s your VAT-taxable turnover: broadly, your sales of goods and services that aren’t VAT-exempt, before expenses. It isn’t your profit. Most standard, reduced and zero-rated sales count; genuinely exempt income (like some financial services or rent on certain property) does not.
What happens if you register late
HMRC can backdate your registration to the date you should have registered. From that date you owe the VAT you should have charged, whether or not you actually added it to your invoices. For a business that has been billing customers without VAT, that bill can come straight out of profit. It’s the single most expensive VAT mistake we see, and it’s completely avoidable.
Going the other way: deregistration
If your turnover falls below the £88,000 deregistration threshold, you can usually come off VAT. Worth knowing if your business is winding down or shrinking, so you’re not filing returns you no longer need to.
Quick tip: check your rolling 12-month turnover at the end of every month. It takes two minutes and removes the risk entirely. Or let us watch it for you.
Want us to track the line for you? Take our 2-minute quiz, or read VAT schemes explained to see which scheme fits once you’re registered.
Frequently asked questions
Common questions about the VAT threshold.
Is the VAT threshold measured against my tax year?+
No. It’s any rolling 12-month period, not your accounting year. That’s why growing businesses often cross it mid-year without noticing.
What counts towards the £90,000?+
Your VAT-taxable turnover: your non-exempt sales of goods and services before expenses. It’s not your profit, and genuinely VAT-exempt income doesn’t count.
What if I go over for one month then drop back down?+
The test is the rolling 12-month total, so a single strong month can still tip you over. If you go over but expect to fall below the deregistration threshold soon, there’s an exception you can apply for. We can check whether it applies to you.
What happens if I register late?+
HMRC can backdate your registration and charge the VAT you should have collected, even if you never added it to invoices. Registering on time avoids paying it out of your own pocket.
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