Many small business owners in the UK ask the same question: “When do I need to register for VAT?” The answer depends on your taxable turnover. In this guide we explain the VAT registration threshold, the two tests HMRC uses, the deadlines, and what happens once you are registered. All figures were checked on GOV.UK on 13 October 2026 and apply to the 2026/27 tax year.
What is the VAT registration threshold?
The VAT registration threshold is £90,000. GOV.UK says you must register for VAT if your total taxable turnover for the last 12 months goes over £90,000.
Taxable turnover means the total of everything you sell that is not exempt from VAT. It includes sales at the standard rate (20%), the reduced rate (5%) and the zero rate (0%). So even if most of what you sell is zero-rated, those sales still count towards the threshold.
The threshold applies to sole traders, partnerships and limited companies in the same way. It is based on the business’s turnover (sales), not its profit.
Test 1: the last 12 months
Look back over any rolling 12-month period, not just the tax year. If your taxable turnover for the last 12 months goes over £90,000, you must register.
- Deadline: register within 30 days of the end of the month in which you went over the threshold.
- Effective date: your VAT registration starts on the first day of the second month after you went over.
GOV.UK gives this example: if you went over the threshold on 15 July, you must register by 30 August, and your effective date of registration is 1 September.
Because the test is “rolling”, it is a good idea to check your last 12 months of sales at the end of every month once you get close to £90,000.
Test 2: the next 30 days
You must also register if you expect your taxable turnover to go over £90,000 in the next 30 days alone. This often happens when a business wins a single large contract.
- Deadline: register by the end of that 30-day period.
- Effective date: the date you realised you would go over the threshold, not the date your turnover actually went over it.
GOV.UK’s example: if you sign a contract on 1 May worth £100,000, you must register by 30 May, and your effective date is 1 May.
What happens if you register late?
If you register late, GOV.UK says you must pay HMRC the VAT due on sales you made from the date you should have been registered. You may also have to pay a penalty, depending on how much you owe and how late you are.
This can be painful, because you may not have charged your customers VAT on those sales. The VAT then often comes out of your own profit. Keeping an eye on your turnover each month is the easiest way to avoid this.
Can you register voluntarily?
Yes. You can register for VAT even if your turnover is below £90,000. This is called voluntary registration. Once registered, you must pay HMRC any VAT you owe from the date they register you.
Some businesses choose to register early because:
- most of their customers are VAT-registered businesses that can reclaim the VAT you charge;
- they buy a lot of goods or equipment and want to reclaim the VAT on those costs;
- they sell mainly zero-rated goods, so they charge little or no VAT but can reclaim VAT on costs.
Voluntary registration is not right for everyone. If your customers are members of the public, adding VAT may make your prices higher or cut your profit. It is worth talking it through before you decide.
What you must do once you are VAT-registered
Being VAT-registered brings new jobs for your business:
- Charge VAT at the right rate on your sales: 20% standard rate, 5% reduced rate (for example children’s car seats and home energy) or 0% zero rate (for example most food and children’s clothes).
- Keep digital records. Under Making Tax Digital for VAT, all VAT-registered businesses must keep certain VAT records digitally and send VAT Returns using compatible software (unless HMRC gives an exemption).
- Send VAT Returns. GOV.UK says you usually send a VAT Return every 3 months. The deadline to submit online is usually one calendar month and 7 days after the end of the period.
- Pay on time. The payment deadline is usually the same as the return deadline.
Common mistakes to avoid
- Only checking at the end of the tax year. The 12-month test is rolling, so you can go over the threshold in any month.
- Forgetting zero-rated sales. They count towards taxable turnover.
- Ignoring one big contract. A single large job can trigger the “next 30 days” test.
- Using spreadsheets with manual copying. Under Making Tax Digital, records must be digitally linked to your software.
How UK Tax Co can help
UK Tax Co helps businesses all over the UK, online. We can check whether you need to register, register you with HMRC, and then prepare and file your returns. Our VAT Returns service costs £129 per quarter. If you also need help with Making Tax Digital, that service costs £79 per quarter.
FAQ
What is the VAT threshold for 2026/27?
£90,000 of taxable turnover in the last 12 months (checked on GOV.UK on 13 October 2026).
Is the threshold based on turnover or profit?
Turnover. It is the total value of your VAT-taxable sales, not your profit.
How long do I have to register after going over £90,000?
Under the 12-month test, you must register within 30 days of the end of the month you went over. Under the next-30-days test, you must register by the end of that 30-day period.
Can I register for VAT if my turnover is under £90,000?
Yes. This is voluntary registration. You must then pay HMRC any VAT you owe from your registration date.
How often do I send a VAT Return?
Usually every 3 months, using Making Tax Digital compatible software.
This article is general guidance, not personal tax advice. Figures checked on GOV.UK on 13 October 2026.
Need help? Call UK Tax Co on 020 7050 0712 or WhatsApp 07579566666.