When to Register for UK VAT, and Whether to Do It Early
The £90,000 threshold and how the rolling test works, the 30-day forward look, what registering voluntarily does to a business that sells to consumers versus businesses, and choosing a scheme.
On this page
The threshold
Registration is compulsory when taxable turnover exceeds £90,000, a figure that has applied since 1 April 2024 and is frozen for the foreseeable future. Deregistration is possible below £88,000. Taxable turnover means all sales that would be standard, reduced or zero-rated if you were registered; exempt supplies such as insurance, most financial services and residential rent do not count.
How the test works
Two tests run continuously. The backward look: at the end of any month, if taxable turnover in the previous twelve months exceeds £90,000, you must register within 30 days of the end of that month, with an effective date of the first day of the following month. The forward look: if at any point you expect taxable turnover in the next 30 days alone to exceed £90,000, you must register immediately, effective from the date you realised.
The backward look is rolling, not annual. A business with a good spring can cross the threshold in May on the strength of the previous June to May, regardless of its financial year.
Voluntary registration
A business under the threshold may register voluntarily. Whether it should depends on who the customers are.
- Business customers who are VAT-registered can reclaim the VAT you charge, so registration costs them nothing and lets you reclaim VAT on your own costs. Usually worth it.
- Consumers cannot reclaim. Registration means either raising prices by 20 percent or absorbing it. Usually not worth it until you have to.
- Exporters and zero-rated sellers charge no VAT on their sales but can reclaim input VAT, so registration is a net refund. Register early.
Choosing a scheme
Standard accounting: VAT on invoices issued and received. The default. Cash accounting: VAT on money received and paid, available under £1.35 million turnover; helps businesses with slow-paying customers. Flat rate scheme: pay a fixed percentage of gross turnover, keep the rest, reclaim almost no input VAT; available under £150,000 and useful for low-cost service businesses, but the 16.5 percent limited-cost-trader rate removes most of the benefit for businesses that buy few goods. Annual accounting: one return a year with instalments, for those who want fewer filings. Schemes can be combined in some cases and changed with notice.
Ecommerce and marketplaces
Sales through Amazon and other marketplaces count towards your turnover, even where the marketplace is the deemed supplier and accounts for the VAT itself. Non-UK sellers holding stock in the UK have no threshold and must register from the first sale. Sales to EU consumers after Brexit are exports from the UK, zero-rated, with the EU VAT handled through IOSS or at import. Postponed VAT accounting lets a registered importer declare and reclaim import VAT on the same return with no cash outlay.
Questions
I crossed £90,000 three months ago and did not register. What now?
Register now with the correct backdated effective date. HMRC will expect VAT on sales from that date, whether or not you charged it, plus a late-registration penalty scaled to the delay. It is materially better to come forward than to be found.
Does the threshold apply per business or per person?
Per taxable person. A sole trader running two trades has one threshold across both. Two separate limited companies each have their own, unless HMRC treats the split as artificial.
Sources
Figures checked 9 September 2026. Tax law changes; verify against the authority before acting on any of them. This guide is general information, not advice on your circumstances.
Talk to a senior accountant. Free.
Thirty minutes, no pitch deck. Tell us the entities and the countries, and we will tell you honestly what applies and what it costs.