Guide

Do I need to register for VAT in the UK?

The short answer: it depends on your taxable turnover, not your profit. The current registration threshold is £90,000 of turnover in any rolling 12-month period. Here's how to check where you stand, what happens if you cross the line, and whether voluntary registration is worth it.

Updated 23 September 2026 About 5 minutes to read

Key takeaways

  • The UK VAT registration threshold is £90,000 of taxable turnover in any rolling 12-month period.
  • It is measured on turnover, not profit — and it's a rolling window, not a tax year.
  • Cross it and you normally have 30 days from the end of the qualifying month to register.
  • You can register voluntarily below the threshold, which lets you reclaim VAT on purchases.
  • Once registered: add VAT to most sales, show your VAT number, file regular returns, and keep digital records under Making Tax Digital.

The three checks, in order

1

Check your rolling 12-month turnover

Sit down and add up the value of everything you've sold in the last 12 months — your invoices, minus VAT already charged, before deducting expenses. This is your "taxable turnover". If it is at or above £90,000 at the end of any month, you are required to register.

2

Check whether you expect to cross it in the next 30 days

It isn't only hindsight that counts. If you know you'll pass £90,000 within the next 30 days — a big contract landing, a burst of seasonal work — you may need to register before you actually cross it. This catches businesses growing quickly.

3

Decide whether voluntary registration makes sense

If you're below the threshold, registration is optional. It's often worthwhile if you buy a lot of VAT-able supplies (you can reclaim that VAT), if your clients are other VAT-registered businesses (they won't mind the VAT), or if you want to look larger. The cost is admin: you must charge VAT, file returns, and stay compliant with Making Tax Digital.

What counts towards the threshold (and what doesn't)

Only taxable supplies count: goods and services subject to VAT at the standard (20%), reduced (5%) or zero (0%) rate. What doesn't count:

  • VAT-exempt supplies (for example most insurance, education and financial services);
  • income you received as an employee, not from your own business;
  • capital items sold as part of a business transfer;
  • money you raised that isn't from sales, such as a loan to the business.

The VAT rates you need to know

  • Standard rate — 20%: most goods and services, including most professional and creative work.
  • Reduced rate — 5%: a few things like domestic fuel and some energy-saving materials.
  • Zero rate — 0%: most food, books, children's clothing and so on. Zero-rated sales still count toward the threshold but you charge no VAT on them.
  • Exempt: outside the VAT system entirely — no VAT charged and no reclaim on related purchases.

What changes the day you register

Once you're VAT-registered, four practical things happen immediately:

  • Your invoices change. You must issue VAT invoices that show your VAT number, the VAT rate and the net, VAT and gross amounts.
  • You charge VAT. Unless your sale is zero-rated or exempt, you add 20% (or the applicable rate) to your prices — and you collect that VAT for HMRC, not for yourself.
  • You file VAT Returns — typically quarterly, on top of your usual tax return.
  • Making Tax Digital applies. You must keep digital records and submit returns through compatible software.

That's why our VAT invoice template has the VAT fields built in — the rate, the VAT number and the net/VAT/gross breakdown are exactly what HMRC expects on a VAT invoice.

Send a correct VAT invoice in a minute

VAT number, rate and net/VAT/gross split already laid out — free, no sign-up.

Open the VAT template

Frequently asked questions

What is the UK VAT registration threshold?

£90,000 of taxable turnover in any rolling 12-month period. Once you pass it, you must register with HMRC within 30 days of the end of the month you crossed it.

Is it £90,000 of turnover or profit?

Turnover — the total value of your taxable sales, before expenses. Profit is irrelevant to the registration threshold.

Does my existing client's VAT status matter if I'm registered?

If you charge a business-to-business client who is also VAT-registered, they can usually reclaim the VAT you charge on their own return, so the extra 20% doesn't cost them. If your client is a consumer who can't reclaim, adding VAT effectively raises your price by a fifth.

Should I register for VAT voluntarily if I'm below £90,000?

Often yes if you buy significant VAT-able supplies (you reclaim the VAT) or sell mostly to registered businesses. It's less attractive if your clients are consumers or if most of your costs are VAT-free.

What counts as taxable turnover for the threshold?

All your supplies that are standard, reduced or zero-rated — i.e. everything VAT-able. Exempt supplies and non-sales income don't count.

If I was under the threshold but crossed it temporarily, do I still register?

Yes — if your rolling 12-month turnover meets or exceeds £90,000, registration is compulsory even if you expect it to drop later. You can apply to deregister if your turnover subsequently falls below the deregistration threshold.

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General guidance only — not legal, tax or accounting advice. The threshold can change in a Budget; check HMRC's current guidance for the latest figure. Last reviewed 23 September 2026.