As of October 2026 you must register for VAT if your taxable turnover for the last 12 months goes over £90,000, or you expect it to in the next 30 days. You can also register voluntarily below that level. You register with HMRC, usually online, and owe VAT from your effective date of registration.
At a glance
- VAT registration threshold
- £90,000 of taxable turnover
- Looking back
- Total taxable turnover for the last 12 months
- Looking forward
- Expected to go over the threshold in the next 30 days
- Deadline after going over
- 30 days from the end of the month you went over
- Effective date after going over
- First day of the second month after you go over
- Voluntary registration
- Allowed below the threshold
- VAT number
- 9 digits, shown on every invoice
What is the VAT registration threshold?
The VAT registration threshold is the level of taxable turnover above which a business must register for VAT. As of October 2026 it is £90,000, according to HMRC’s VAT Notice 700/11 supplement, which was last updated on 31 March 2026. The figure has applied since 1 April 2024, when it rose from £85,000.
VAT is a tax added to most products and services sold by VAT-registered businesses, and the standard rate is 20%. Once you are registered you charge VAT on your taxable sales, reclaim the VAT you pay on business purchases and send HMRC a VAT return, usually every three months.
The threshold changes from time to time and HMRC publishes the current figure on GOV.UK, so check the source before you rely on a number you read elsewhere, including here.
What counts as taxable turnover?
Taxable turnover is the total value of everything you sell that is not VAT exempt or out of scope. It is not your profit, and it is worked out before you take off costs.
GOV.UK says it includes:
- Standard-rated, reduced-rated and zero-rated goods and services
- Goods you hired or loaned to customers
- Business goods used for personal reasons
- Goods you bartered, part-exchanged or gave as gifts
- Services you received from businesses in other countries that you had to reverse charge
- Building work over £100,000 that your business did for itself
Zero-rated sales still count towards the threshold even though the VAT charged on them is 0%. Sales that are VAT exempt, or out of scope, do not count, and you do not have to register if those are all you sell.
If you take over a VAT-registered business, you must register if the combined taxable turnover of the new business and your existing business is over the threshold.
When must you register for VAT?
You must register in either of two situations: your taxable turnover for the last 12 months has gone over £90,000, or you expect it to go over £90,000 in the next 30 days. The two tests have different deadlines, which is where businesses most often slip.
| Gone over in the last 12 months | Expect to go over in the next 30 days | |
|---|---|---|
| The trigger | Taxable turnover for the last 12 months goes over £90,000 | You realise turnover will go over £90,000 in the next 30 days |
| Register by | 30 days after the end of the month in which you went over | The end of that 30-day period |
| Effective date of registration | First day of the second month after you go over | The date you realised, not the date turnover went over |
| GOV.UK example | Turnover passes £90,000 on 15 July: register by 30 August, effective date 1 September | A £100,000 contract arranged on 1 May, paid at the end of May: apply by 30 May, effective date 1 May |
Because the first test looks at a rolling 12 months, it is worth checking your running total at the end of every month rather than once a year.
A single large order can trip the forward-looking test long before your 12-month total gets near the limit, as the second GOV.UK example shows. If you know a big contract is coming, check the 30-day test as soon as you sign.
Can you register for VAT voluntarily?
Yes. You can choose to register for VAT if your turnover is below £90,000, and GOV.UK calls this voluntary registration. HMRC will register you and you owe any VAT from the date they register you.
Registration is a trade-off. A registered business can reclaim the VAT it pays on things bought for the business, but it must also charge VAT on its taxable sales, keep digital records and send returns. Whether it helps depends on who your customers are and what you buy, so ask your accountant before you decide. Our guide to sole trader and limited company differences covers other tax set-up choices that sit alongside it.
Are there exceptions and exemptions?
Yes, in two cases. You can apply for a registration exception if your taxable turnover goes over the threshold only temporarily, and you can ask HMRC for an exemption if most of your taxable sales are zero-rated.
- Exception: HMRC considers your request and writes to confirm. If you do not get one, it registers you for VAT. This one is applied for by post using form VAT1, not online.
- Exemption: you ask for permission, which HMRC may refuse, and if it does it registers you for VAT. You apply online or by post.
- Based outside the UK: if your business is outside the UK and you supply goods or services to the UK, you must register whatever your turnover. A non-established taxable person cannot use the £90,000 threshold.
In Northern Ireland, GOV.UK adds a separate £90,000 test for businesses that sell only exempt or out-of-scope goods and services but buy goods from VAT-registered EU suppliers for use in the business. Sales of goods from Northern Ireland to consumers in the EU have their own distance selling threshold of £8,818. If this could apply to you, read GOV.UK’s guidance on Northern Ireland and EU VAT.
How do you register for VAT?
You usually register online with HMRC, signing in with your HMRC details or creating them the first time. You can save your application and finish it later. What you need depends on the type of business.
| Type of business | What you need |
|---|---|
| Limited company | Company registration number, bank account details, Unique Taxpayer Reference (UTR), annual turnover and an estimate of taxable turnover for the next 12 months, plus information about your Self Assessment, Corporation Tax and PAYE |
| Individual or partnership | National Insurance number, an identity document such as a passport or driving licence, bank account details, UTR if you have one, annual turnover and an estimate of taxable turnover for the next 12 months, plus Self Assessment, payslip and P60 information |
Some applications must go by post on form VAT1, including a registration exception and joining the Agricultural Flat Rate Scheme. If you are unsure what a UTR is or where to find yours, see our guide to the UTR number.
You can appoint an accountant or agent to deal with HMRC on your behalf. After registration you get a 9-digit VAT registration number that must appear on all invoices you raise, details of your first return and payment, and confirmation of your effective date of registration, all by post.
HMRC signs new VAT-registered businesses up to Making Tax Digital for VAT automatically, unless they are exempt or have applied for an exemption. See our guide to Making Tax Digital for the records and software that follow.
Can you charge VAT while you wait for your number?
No. You cannot put VAT on your invoices until you have your VAT registration number, but you can raise your prices to account for the VAT you will owe. You must pay HMRC VAT on invoices raised from your effective date of registration.
GOV.UK’s example is a £100,000 contract with an effective date of 1 May. You tell the customer you will add 20%, raise an invoice for £120,000 and, once your number arrives, reissue it showing the full amount including the £20,000 of VAT. The customer pays nothing extra and can reclaim that VAT from HMRC on their next return.
What happens if you register late?
If you register late, you must pay VAT on any sales you have made since the date you should have registered. You might also have to pay a penalty, depending on how much you owe and how late your registration is.
If you did not add VAT to invoices you should have, you cannot assume customers will pay it on top. The bill from your effective date still falls on the business, so a late registration can turn into a cash-flow problem very quickly.
Registering also starts a new rhythm of VAT payments. If a bill from HMRC is a worry, see how to pay a VAT bill for deadlines and HMRC Time to Pay for what to do if you cannot pay it in full on time. If your turnover later falls, our guide on how to deregister for VAT explains the cancellation rules.
Where does Capzy fit in?
Registering for VAT is not something Capzy arranges. We are a credit broker, not a lender, we are paid by the lender, and we do not give tax, legal or accounting advice, so ask an accountant whether and when to register.
Where we can help is the finance that follows registration. VAT bills are large and fall due on fixed dates, and some businesses fund them with VAT loans, which cost interest and fees. You can check your funding options with a soft search that does not affect your credit score. Any offer is subject to status and lender criteria. For planning, our guide to the cash flow forecast shows where to put VAT payments.
Sources
- Register for VAT, GOV.UK
- How VAT works, GOV.UK
- VAT Notice 700/11: supplement, HM Revenue & Customs
- Making Tax Digital for VAT, GOV.UK
Capzy is a credit broker, not a lender. We get paid by the lender. This page is general information, not financial, tax or legal advice. Finance is subject to status, lender criteria and affordability; rates and terms depend on your circumstances.