As of 2026, the UK VAT registration threshold is £90,000 of taxable turnover in any rolling 12-month period. A business must register for VAT with HMRC once its taxable turnover goes over that figure. The threshold is not based on the calendar year or the tax year, but on any 12 months in a row.

When You Must Register For VAT

You must register for VAT in two situations. The first is when your taxable turnover over the past 12 months goes above £90,000, in which case you have 30 days from the end of that month to register. The second is when you expect your taxable turnover to go above £90,000 in the next 30 days on its own, which is known as the forward-look test. Checking your rolling 12-month turnover at the end of each month is the simplest way to know when you are getting close.

Registering Voluntarily

You can register for VAT voluntarily even if your turnover is below £90,000. Many businesses do this when most of their customers are themselves VAT-registered, because those customers can reclaim the VAT charged to them, so adding VAT does not put them off. Voluntary registration also lets you reclaim the VAT on your own purchases. For a business that sells mainly to consumers, who cannot reclaim VAT, registering early adds 20% to prices and needs more thought.

The Deregistration Threshold

The deregistration threshold is £88,000. If your taxable turnover falls below this figure, you can ask HMRC to cancel your VAT registration. This is useful for a business whose sales have dropped or that has stopped trading. Both the £90,000 registration threshold and the £88,000 deregistration threshold have been unchanged since April 2024.

If You Go Over The Threshold Temporarily

If your turnover goes over £90,000 only because of a one-off spike, and you expect it to stay below the £88,000 deregistration threshold over the next 12 months, you can apply to HMRC for an exception from registration. You have to request this at the time and show why you expect turnover to fall back, and HMRC decides whether to grant it. If the exception is refused, you must register in the normal way.

What Counts Toward The Threshold

Taxable turnover is the total of everything you sell that is not exempt from VAT. It includes standard-rated, reduced-rated, and zero-rated sales, so even zero-rated goods count toward the £90,000 threshold. Sales that are exempt from VAT, such as certain insurance or financial services, do not count. Knowing which of your sales are standard, reduced, or zero-rated is therefore the first step in working out your taxable turnover.

What Happens When You Register

Once you are registered, you must charge VAT on your taxable sales, usually at the standard 20% rate, and show it on your invoices. You then file VAT returns, normally every quarter, reporting the VAT you have charged and reclaiming the VAT on your purchases. You can work out how much VAT to add to a price with the VAT calculator. You register for VAT through HMRC on the GOV.UK website, which also sets out the full registration process.

What Happens If You Register Late

If you register late, you still have to account for the VAT you should have charged from the date you were required to register, known as your effective date of registration. HMRC can also charge a failure-to-notify penalty based on the VAT owed and how late the registration is. Keeping an eye on your rolling turnover each month is the best way to avoid this.

VAT Threshold FAQs

What is the VAT registration threshold?

The UK VAT registration threshold is £90,000 of taxable turnover in any rolling 12-month period. A business must register for VAT with HMRC once its taxable turnover goes above this figure.

When do I have to register for VAT?

You must register within 30 days of the end of the month in which your rolling 12-month taxable turnover went above £90,000. You must also register if you expect to go above £90,000 in the next 30 days alone.

Can I register for VAT voluntarily?

Yes, you can register voluntarily even if your turnover is below £90,000. This is often worthwhile when most of your customers are VAT-registered and can reclaim the VAT you charge.

What is the VAT deregistration threshold?

The deregistration threshold is £88,000. If your taxable turnover falls below this figure, you can ask HMRC to cancel your VAT registration.

Does taxable turnover include the VAT I charge?

No. Taxable turnover is the value of your sales that are not exempt from VAT, including standard-rated, reduced-rated, and zero-rated sales. It does not include the VAT you add on top.