The threshold: £90,000
You must register for VAT if your VAT-taxable turnover goes over £90,000. This figure has applied since April 2024 and remains in place for 2026/27. There's also a deregistration threshold of £88,000 if your turnover falls.
How the threshold is measured
This is the part people miss. The £90,000 is judged on a rolling 12-month basis — not your accounting year, and not the tax year. At the end of every month you look back at the previous 12 months. There are two triggers:
- The look-back test: at the end of any month, your turnover for the previous 12 months has gone over £90,000
- The look-ahead test: you expect your turnover to go over £90,000 in the next 30 days alone (for example, you land a big contract)
The deadlines that catch people out
If you go over on the rolling test, you must register within 30 days of the end of the month you exceeded it, with registration effective from the first day of the second month after you went over. If you're caught by the "next 30 days" test, you must register by the end of that 30-day period. Miss these and HMRC can charge penalties — and you may still owe the VAT you should have charged.
Should you register voluntarily?
You can register before you hit the threshold, and sometimes it's worth it:
- You can reclaim VAT on your purchases and expenses
- It can make a small business look more established to other businesses
- If most of your customers are VAT-registered, charging VAT costs them nothing as they reclaim it
The flip side: you'll have to charge VAT, which can make you more expensive to customers who can't reclaim it (such as the public), and you'll have quarterly returns to file.
Getting it right
If you're approaching £90,000, keep a close eye on your rolling turnover and talk to us before you cross it. We handle registration, get you set up on Making Tax Digital software, and take care of your quarterly VAT returns for a fixed £180 a quarter. Our free VAT calculator is handy for quick sums in the meantime.
When do you need to register for VAT? — FAQs
What is the VAT registration threshold for 2026/27?
The threshold is £90,000 of VAT-taxable turnover, measured on a rolling 12-month basis. The deregistration threshold is £88,000.
Can I register for VAT before I reach the threshold?
Yes — voluntary registration lets you reclaim VAT on purchases, which can be worth it depending on your customers and costs. We'll advise whether it makes sense for you.
How often do I file VAT returns?
Most businesses file quarterly under Making Tax Digital. We prepare, check and submit your returns for a fixed £180 a quarter.
Let's sort your books out
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