The VAT registration threshold
When you must register for VAT
VAT registration is compulsory when your taxable turnover in any rolling 12-month period exceeds £90,000. You must register within 30 days of the end of the month in which you exceeded the threshold.
What counts as taxable turnover
Taxable turnover includes standard-rated sales (20%), reduced-rated sales (5%), and zero-rated sales (0%). It does not include exempt supplies (such as most financial services and residential property rental) or dividends. For most small service businesses, all income is standard-rated and taxable turnover equals total turnover.
Monitoring your position
View your total sales in the profit and loss report for the last 12 months at the end of each month. If this figure exceeds £90,000, you have crossed the threshold. Contact us as soon as your rolling 12-month total approaches £70,000 so we can help you prepare for registration before the deadline.
💡 Important: Missing the registration deadline means HMRC backdates the registration and assesses output VAT on all sales from the date you should have registered, whether or not you collected it from customers. The cost comes from your own company funds.
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