VAT registration becomes compulsory once you cross the threshold, but you can also register voluntarily. This guide explains the £90,000 rule, how to register, and what changes afterwards.
Published July 2026 · Updated July 2026
Registration is compulsory once your taxable turnover exceeds £90,000 in any rolling 12-month period, not a fixed tax year. You must register within 30 days of passing it. Keep an eye on your rolling total so it does not creep up unnoticed.
Below the threshold you can still register. It can pay off if you mainly sell to other VAT-registered businesses (who reclaim the VAT) or buy a lot of VATable stock and equipment you would like to reclaim VAT on. If you sell mostly to consumers, it may just make you 20% more expensive.
You register through your HMRC online account. You will get a VAT number and an effective date. From then on you charge VAT on your sales and can reclaim VAT on eligible purchases.
You add VAT to your prices, issue valid VAT invoices, file VAT returns (usually quarterly), and keep digital records under Making Tax Digital. You might also consider the Flat Rate Scheme to simplify things.
Your taxable turnover, most sales, excluding VAT-exempt income. It is measured over any rolling 12 months, not the tax year.
If it was a one-off and you expect to stay under £88,000, you can apply for an exception. Otherwise you must register.
It simplifies VAT and can save money for service businesses with few costs, but not always. Compare it against standard VAT first.
This guide is general information for UK small business owners, not accounting, tax or legal advice. Rules, rates and thresholds reflect 2026/27 and change over time; always check the linked official source or a qualified adviser for your situation.