In short: you must register for VAT once your total taxable turnover passes £90,000 in any rolling 12-month period — it is not tied to your tax year or accounting year. Check at the end of every month, tell HMRC within 30 days, and your registration takes effect from the first day of the second month after you crossed the line. You can deregister when expected turnover falls back under £88,000.
What counts towards the £90,000
The threshold is measured against your VAT-taxable turnover: everything you sell that would be charged at 20%, 5% or 0% VAT if you were registered. That includes goods you hire out or loan, business goods you take for personal use, items you barter or part-exchange, and commission you earn selling for someone else.
The most common trap: zero-rated sales count. A market trader selling only children's clothes or books (0% VAT) still adds every sale towards the £90,000. Only genuinely exempt income — insurance, most education, health services, finance — is left out. See our Flat Rate Scheme guide if you're nearer £150,000.
It's a rolling 12 months — not your tax year
At the end of every month, total your taxable sales for that month plus the previous 11. Your accounting year-end, the April tax year and calendar years are all irrelevant. Here's how fast it happens for a growing business:
| Month-end | That month's sales | Rolling 12-month total | Register? |
|---|---|---|---|
| April | £7,600 | £86,900 | Not yet |
| May | £8,100 | £89,600 | Not yet |
| June | £8,900 | £91,200 | Yes — clock starts |
Cross the line in June and the deadlines look like this:
| Deadline | Date in this example | What happens |
|---|---|---|
| End of the month you exceeded | 30 June | Rolling 12-month total confirmed over £90,000 |
| 30 days after that month-end | By 30 July | You must notify HMRC (online is fastest) |
| First day of the second month after | 1 August | Effective date of registration — VAT applies from here |
The forward-looking "30 days alone" rule
There's a second trigger most people miss. If you expect your taxable turnover to pass £90,000 within the next 30 days alone — typically because you've just signed one enormous contract — you must register by the end of that 30-day period, and your registration is effective from the day you realised. Don't wait for the invoice to be paid; expectation is enough to trip the rule.
What if you register late?
HMRC backdates your registration to the date you should have registered, and you owe the VAT from that date even if you never charged it to your customers — the shortfall comes out of your past income unless you can persuade clients to pay extra retroactively. On top of the back tax:
- Penalty: 5% of the net VAT due if you're up to 9 months late, 10% if 9–18 months late, 15% beyond that (minimum £50).
- Interest: charged on VAT that arrived late, running from the original due dates.
- Mitigation: an unprompted, honest disclosure before HMRC contacts you materially reduces the penalty.
One-off spike? Ask for an exception. If a single big job pushed you over £90,000 but the next 12 months will clearly be under £88,000, write to HMRC with your evidence — they can waive registration rather than having you register and immediately deregister.
Voluntary registration before £90,000
You don't have to wait. Anyone making taxable supplies below the threshold can register voluntarily — and sometimes it genuinely pays:
Why register early
- Reclaim VAT on purchases — equipment, stock and materials you buy for the business stop costing you 20% extra
- Pre-registration VAT: reclaim goods bought up to 4 years ago (still on hand) and services up to 6 months ago on your first return
- Credibility — a VAT number signals an established business to corporate clients
- No cliff edge — pricing and systems are sorted before growth forces the issue
Why hold off
- Your prices effectively rise 20% for consumers who can't reclaim VAT — or you absorb it yourself
- MTD digital record-keeping and a VAT return every quarter (accountant or software costs)
- Cash-flow risk: you owe HMRC the VAT even if a client pays your invoice late
- Pointless if most of your sales are exempt — there's no input VAT to reclaim against them
Rule of thumb: if your customers are mostly VAT-registered businesses, register early — they reclaim your VAT so the price rise doesn't hurt them. If you mostly sell to the public, wait until the law makes you. Service businesses weighing it up should also check the Flat Rate Scheme, which simplifies the admin but isn't always cheaper.
Two businesses, one threshold
The £90,000 limit applies per person — one sole trader, one partnership, one limited company — not per shop, website or brand. HMRC looks hard at "artificial separation": if your two businesses share premises, staff, bank accounts or customers, or one exists mainly to stay under the threshold, HMRC can treat them as a single business and backdate the VAT. Genuine, independent businesses are fine; contrived splits are a classic tax-tribunal loss.
Northern Ireland note
The £90,000 threshold applies UK-wide, Northern Ireland included. NI is different in one respect: because goods moving between Northern Ireland and the EU follow EU VAT rules under the Windsor Framework, businesses trading goods with the EU may have EU-facing obligations too — but registration itself, and the threshold, are the same as the rest of the UK.
How to register
- Register online via GOV.UK — you'll need your turnover figures, bank details and business activity. A VAT number usually arrives within 30 working days.
- From your effective date of registration, start charging VAT (put prices up or treat current prices as VAT-inclusive) and re-issue proper VAT invoices once your number lands.
- Keep digital records under Making Tax Digital, file a return each quarter, and pay what's due within one month and seven days of the period end.
- Registration via an accountant or agent is fine — they use the same HMRC portal.
Falling back below: deregistering at £88,000
Growth isn't one-way. If you expect taxable turnover in the next 12 months to be £88,000 or less — or you stop making taxable supplies entirely — you can apply to deregister through the same GOV.UK portal. You stop charging VAT from your deregistration date, file one final return (which may include VAT on stock and assets still on hand), and must keep your VAT records for six years. Remember: anyone whose turnover shrank because they wanted to deregister will face questions if it rebounds within months.
⚡ Working out VAT after registering? Use the free calculator Add or remove VAT at 20%, 5% or any custom rate. Instant, copy-ready results.Frequently asked questions
Does zero-rated turnover count towards the £90,000 threshold?
Yes. The threshold applies to your total VAT-taxable turnover, which includes sales at 20%, 5% and 0%. Only genuinely exempt income, such as insurance, education or health services, is excluded from the count.
Is the VAT threshold based on my tax year or financial year?
No. It is a rolling 12-month test. At the end of every month, add up your taxable turnover for the previous 12 months; if the total has passed £90,000, you must register. Your accounting year and the tax year are irrelevant to the test.
What if I only go over the threshold temporarily?
If turnover is expected to fall back below £90,000 — for example after a one-off contract — you can ask HMRC for an exception from registration. Write to HMRC with evidence that the next 12 months will be under the deregistration threshold of £88,000; if they agree, you do not have to register this time.
Can I register for VAT voluntarily before I reach £90,000?
Yes. Voluntary registration lets you reclaim VAT on purchases and can boost credibility with business clients. In return you must charge VAT, keep MTD-compliant digital records and file regular returns — so it is usually worthwhile if your customers are VAT-registered businesses, less so if you mainly sell to consumers.
What happens if I register for VAT late?
HMRC will backdate your registration and you must pay the VAT you should have charged from that date, even if you did not collect it from customers. They can also charge a penalty of 5% to 15% of the net VAT due (minimum £50) depending on how late you are — telling them before they find you reduces it.
When do I start charging VAT after registering?
From your effective date of registration, even if your VAT number and certificate have not arrived yet. Increase your prices by VAT or treat existing prices as VAT-inclusive, then re-issue proper VAT invoices once the number comes through, usually within 30 working days of applying.
Can I deregister if my turnover falls below £90,000?
You can apply to deregister once you expect your taxable turnover over the next 12 months to be £88,000 or less — the deregistration threshold — or if you stop making taxable supplies altogether. You stop charging VAT from your deregistration date and file one final VAT return.
If I run two businesses, do their turnovers combine for VAT registration?
Usually yes. The £90,000 threshold applies per person — a sole trader, partnership or limited company — not per business name. If HMRC decides two businesses are artificially separated to stay under the threshold, it can register them as one and backdate the liability.
Sources and review
This guide was checked against GOV.UK guidance, including Register for VAT and VAT registration: when to register, on 1 August 2026. The £90,000 registration threshold and £88,000 deregistration threshold are current at the review date and were last changed in April 2024.
This guide is general information, not tax advice — your own circumstances may differ, so confirm deadlines with HMRC or an accountant before acting. See our disclaimer. Spot an error? Tell us and we'll fix it.