UK tax and accounts basics, explained
VAT Registration Threshold Explained
8 November 2026
General information, not tax adviceEvery figure here is quoted from GOV.UK, with the tax year it applies to. Your own position can differ, so check your HMRC online account and the linked GOV.UK page, or speak to a qualified accountant.
The VAT registration threshold decides when a business has to register for VAT. This guide explains the threshold and the time limits as GOV.UK states them, with links to each GOV.UK page. It's general information, not tax advice.
Quick answer: GOV.UK says you must register for VAT if your total taxable turnover for the last 12 months goes over £90,000, or if you expect it to go over £90,000 in the next 30 days. You can choose to register if your turnover is less than £90,000. The standard rate of VAT is 20%.
Key Takeaways
The VAT threshold is £90,000 of taxable turnover.
It's based on your taxable turnover for the last 12 months, not the tax year.
If you went over it, register within 30 days of the end of the month you went over.
If you expect to go over it in the next 30 days, register by the end of that 30-day period.
You can register voluntarily below the threshold.
The threshold
GOV.UK's page on when to register for VAT says you must register if either:
your total taxable turnover for the last 12 months goes over £90,000 (the VAT threshold)
you expect your taxable turnover to go over £90,000 in the next 30 days
You don't have to register if you only sell VAT exempt or out of scope goods and services. Different rules apply if you're based outside the UK.
What counts as taxable turnover
GOV.UK describes taxable turnover as the total value of everything you sell that isn't VAT exempt or out of scope. Among other things, it includes zero-rated, reduced-rated and standard-rated goods, as well as goods you hired or loaned to customers, business goods used for personal reasons, and goods you bartered, part-exchanged or gave as gifts.
If you've gone over the threshold
If your taxable turnover for the last 12 months goes over £90,000, GOV.UK says you have to register within 30 days of the end of the month when you went over. Your effective date of registration is the first day of the second month after you go over.
GOV.UK gives this example: on 15 July your taxable turnover for the last 12 months is £100,000, the first time it has gone over the threshold. You must register by 30 August, and your effective date of registration is 1 September.
If you expect to go over in the next 30 days
If you realise your taxable turnover will go over £90,000 in the next 30 days, you have to register by the end of that 30-day period. GOV.UK says your effective date of registration is the date you realised, not the date your turnover went over the threshold.
In GOV.UK's example, on 1 May you arrange a £100,000 contract, to be paid at the end of May. You must apply by 30 May, and your effective date of registration is 1 May.
Registering late, or going over for a short time
GOV.UK says that if you register late, you must pay VAT on any sales you've made since the date you should have registered, and you might need to pay a penalty.
If your turnover goes over the threshold only temporarily, you can apply for a registration exception. HMRC will write to confirm whether you get one. If you don't, they'll register you.
Registering voluntarily
You can choose to register if your turnover is less than £90,000. GOV.UK's guide to what a sole trader is says you can register before you meet the requirements if you want to reclaim VAT on business expenses. You must pay HMRC any VAT you owe from the date they register you.
If you're just starting out, our guide on how to register as self-employed in the UK covers the first steps with HMRC.
How to register and what happens next
GOV.UK's page on how to register for VAT says you can usually register online. After registering you'll get a 9-digit VAT registration number, which you must include on all invoices you raise, and confirmation of your effective date of registration. HMRC will sign your business up to Making Tax Digital for VAT, unless it's exempt or you've applied for an exemption.
You can't include VAT on your invoices until you get your VAT registration number, but GOV.UK says you can increase your prices to account for the VAT you'll need to pay.
How VAT works once you're registered
GOV.UK's overview of how VAT works says a VAT-registered business must charge VAT at the correct rate, keep records of the VAT it pays on business purchases, and usually send a VAT return to HMRC every 3 months. The VAT you pay is usually the difference between the VAT you've charged customers and the VAT you've paid to other businesses.
The VAT rates page gives the standard rate as 20% for most goods and services, a reduced rate of 5% for some, and a zero rate for others, such as most food and children's clothes.
Other taxes to keep an eye on
VAT is separate from Income Tax. Our guide to allowable expenses for the self-employed covers what reduces your taxable profit.
If you send a Self Assessment return, our guide to Self Assessment tax return deadlines gives the dates.
Our guide to payments on account explains the 31 January and 31 July instalments.
For thresholds and dates on one page, see key tax dates and thresholds.
Frequently asked questions
What is the VAT threshold?
GOV.UK says the VAT threshold is £90,000. You must register if your taxable turnover for the last 12 months goes over it, or if you expect it to go over £90,000 in the next 30 days.
Is the VAT threshold based on the tax year?
No. GOV.UK says to look at your total taxable turnover for the last 12 months, not your turnover for the tax year.
How long do I have to register once I go over?
GOV.UK says you must register within 30 days of the end of the month when you went over the threshold.
Can I register for VAT if I'm under the threshold?
Yes. GOV.UK says you can choose to register if your turnover is less than £90,000. This is called voluntary registration.