VAT Registration · United KingdomThe VAT threshold is a rolling 12-month test. Most late registrations start there.
We check when you must register for VAT, whether registering earlier makes sense, which scheme fits and how your first returns will be filed under Making Tax Digital.
Tax
At a glance
- Authorities
- HM Revenue & Customs (HMRC)
- Forms & references
- VAT1VAT2VAT68VAT7
- Registered with
- HMRC
- Threshold
- £90,000 taxable turnover, rolling 12 months (at the time of writing)
- Deadline
- Within 30 days of the end of the month you go over
- Returns
- Usually quarterly, through MTD software
Overview
What it is, and why it matters.
VAT registration is compulsory once your VAT-taxable turnover for any rolling 12-month period goes over the registration threshold, or when you expect it to go over in the next 30 days alone. The threshold is £90,000 at the time of writing, unchanged since 1 April 2024.
Below the threshold you can register voluntarily. That often makes sense when your customers are VAT-registered businesses or you have significant VAT on costs to reclaim, and less so when you sell to consumers who can’t recover it.
Businesses without a UK establishment have no threshold. A non-established taxable person must register as soon as it makes taxable supplies in the UK, which catches many overseas sellers and some UK companies that are run entirely from abroad.
Once registered, you charge VAT, keep digital records and file returns, usually quarterly, through software that works with Making Tax Digital.
Who needs it
Who typically needs it.
- 01
Growing small businesses
Sole traders, partnerships and companies whose taxable turnover is getting close to the threshold.
- 02
Online sellers
Online shops and marketplace sellers, whose turnover can climb quickly over a single peak season.
- 03
B2B consultancies and agencies
Firms whose clients can reclaim VAT, where registering early may cost clients nothing and lets you recover VAT on costs.
- 04
Overseas businesses selling into the UK
Non-established businesses that need to register from their first UK taxable supply.
- 05
Buyers of an existing business
Purchasers taking over a VAT-registered business as a going concern, who may be able to keep the seller’s VAT number.
When you need it
The moments that usually trigger it.
- Your taxable turnover for the last 12 months has gone over £90,000 (at the time of writing).
- You’ve won a contract that will take you over the threshold in the next 30 days on its own.
- Your business clients are asking for VAT invoices, or you have large VAT-bearing costs to reclaim.
- You’re based outside the UK and have started selling goods or services here.
- You’ve realised you went over the threshold months ago and didn’t register.
- You’re buying a business that is already VAT-registered.
Scope
Exactly what we handle.
Our engagement letter lists these specifically, so you know what is included before any work begins.
- 01
Running the rolling 12-month test on your turnover month by month, leaving out exempt and out-of-scope income.
- 02
Advising whether voluntary registration is worth it, with the effect on your prices and margins.
- 03
Choosing the effective date of registration and reviewing VAT on earlier purchases that can be reclaimed.
- 04
Comparing the Flat Rate, Cash Accounting and Annual Accounting schemes against your actual figures.
- 05
Completing the registration with HMRC, including partnership details (VAT2) or a transfer of registration (VAT68).
- 06
Checking whether a company run from abroad is established in the UK for VAT purposes.
- 07
Connecting MTD-compatible software and setting up VAT codes in your bookkeeping.
- 08
Putting late registrations right with HMRC, including backdated returns.
The process
How it runs, step by step.
Timings depend on the authority and on how quickly documents come together. We tell you what’s typical for your case at the start.
Start with a conversationTurnover review
We go through your sales for the last 12 months and the next 30 days, and sort them into standard-rated, reduced, zero-rated, exempt and outside the scope.
Decision and scheme
We agree whether and when to register, and whether one of the special accounting schemes suits you.
Application
We submit the registration to HMRC with the effective date, business activity and bank details.
Waiting for the VAT number
Until HMRC issues your number you can’t show VAT on invoices, but you are liable from the effective date. We plan your pricing and invoicing for the gap.
MTD set-up
We connect your software to HMRC, set up VAT codes and diarise the first return and payment.
What we’ll need
The information to have ready.
A typical checklist. After the first conversation we send a version specific to your situation, so you don’t gather anything you don’t need.
Business details
- Legal name, company number or UTR, and business address
- A description of what you sell and who to
- Business bank account details
Turnover
- Monthly sales for the last 12 months
- A forecast for the next 12 months, including any large contracts
- A split of sales by type and by where customers are
Costs
- Goods and assets bought in the last 4 years that you still hold
- Services bought in the last 6 months
Businesses run from abroad
- Where management decisions are made and by whom
- Any UK premises, staff or equipment
- Details of where the business is established or registered elsewhere
Please don’t email passports or bank statements. Once we’ve spoken, you’ll get access to a secure upload.
Common mistakes
Where this usually goes wrong.
The problems we are most often asked to fix, and what they tend to cost.
- Mistake 01
Checking turnover once a year
The test is rolling. A business that only looks at its annual accounts can be months past the threshold before it notices, with VAT due on sales it never charged VAT on.
- Mistake 02
Counting the wrong turnover
Zero-rated sales count towards the threshold; exempt and out-of-scope income does not. Getting this wrong means registering too early or too late.
- Mistake 03
Assuming the threshold applies to non-UK businesses
A business not established in the UK must register from its first UK taxable supply, whatever the value.
- Mistake 04
Joining the Flat Rate Scheme without checking the maths
Businesses that spend little on goods can fall into the higher limited cost trader rate, which can leave them worse off than under standard VAT accounting.
- Mistake 05
Not planning for the wait
You can’t charge VAT as a separate item until the number arrives, but you are liable from the effective date. Businesses that ignore the gap often end up absorbing the VAT themselves.
Worth knowing
The limits, stated upfront.
The VAT treatment of particular goods and services can turn on fine detail. Where a ruling from HMRC is sensible, we say so and can help prepare the request.
EU VAT registrations, the EU One Stop Shop schemes and other countries’ sales taxes are outside this service.
Northern Ireland follows specific VAT rules for goods under the Windsor Framework, which we scope separately.
HMRC decides whether to register you and may ask for more evidence, particularly from overseas businesses; processing times vary.
Questions
VAT Registration: frequently asked.
If yours isn’t here, ask us directly. We’ll answer in plain terms.
Ask a questionWhat is the VAT registration threshold?
£90,000 of VAT-taxable turnover in any rolling 12 months, at the time of writing. It has been at that level since 1 April 2024, and we confirm the current figure when we review your numbers.
How quickly do I have to register once I go over?
Within 30 days of the end of the month in which your rolling 12-month turnover went over the threshold. Your registration then takes effect from the first day of the second month after you went over.
Can I register voluntarily?
Yes, if you make or intend to make taxable supplies. It often suits businesses selling to VAT-registered customers; for consumer-facing businesses it usually means raising prices or absorbing the VAT.
Can I reclaim VAT on things I bought before registering?
Often, within limits. Goods you still hold that were bought up to 4 years before registration, and services bought up to 6 months before, can usually be reclaimed if they relate to your VAT-registered business.
Does the threshold apply to overseas businesses?
No. If your business is not established in the UK, you must register as soon as you make taxable supplies here, whatever their value.
Which VAT scheme should I use?
It depends on your turnover, costs and cash flow. Cash Accounting helps when customers pay late, Annual Accounting reduces the number of returns, and the Flat Rate Scheme can simplify things for some small businesses but not those with low costs.
Do I need special software?
Yes. VAT-registered businesses keep digital records and submit returns through software compatible with Making Tax Digital, and we help you choose and connect it.
Related
Often needed alongside this.
The equivalent in our other countries
Speak with a consultant
Talk to us about vAT Registration.
Pick the closest match and we’ll take it from there. You’ll get a written scope and fee before any work begins.
Or use our three-step guide, or email hello@fiscorra.com
