2026/27 Tax Year

Do I Need to Register for VAT?

Q: What is the VAT registration threshold?

You must register for VAT once your VAT-taxable turnover for the previous 12 months exceeds £90,000, or if you expect it to exceed that threshold in the next 30 days alone. Check GOV.UK for the current threshold, as it's reviewed periodically.

Q: Should I register for VAT voluntarily below the threshold?

It can make sense if most of your customers are VAT-registered businesses who can reclaim the VAT you charge, or if you have significant VAT-able costs you want to reclaim. It's usually less appealing if your customers are mainly individual consumers who can't reclaim VAT.

Q: What changes once I'm VAT registered?

You must charge VAT on your taxable sales, submit VAT returns (usually quarterly) via Making Tax Digital compatible software, and you can reclaim VAT on eligible business purchases.

Q: What happens if I register late?

Late registration can result in a penalty based on how much VAT you should have charged and how late you were, plus you may still owe HMRC the VAT you should have collected from the date you were required to register, even if you didn't charge it to customers.

By Rasika F.

Updated July 2026 • PayToolkit

The VAT threshold and whether voluntary registration makes sense for you | Updated 5 September 2026

Last Updated5 September 2026

Quick Answer

You must register once your VAT-taxable turnover exceeds £90,000 in the past 12 months, or you expect to exceed it in the next 30 days alone. Below that, registration is optional and can sometimes be worthwhile.

The VAT Registration Threshold

Registration becomes compulsory once your rolling 12-month VAT-taxable turnover passes £90,000, or immediately if you expect to exceed it within the next 30 days alone (for example due to a single large contract). Check GOV.UK for the current figure, as thresholds are reviewed periodically.

Voluntary Registration

You can register below the threshold if it suits your business — commonly worthwhile if most of your customers are VAT-registered businesses (who can reclaim the VAT you charge) or if you have significant VAT on costs you'd like to reclaim. It's usually less beneficial if you sell mainly to consumers, since it effectively raises your prices or squeezes your margin.

What Changes Once You're Registered

You must charge VAT (usually 20%) on your taxable sales
You submit VAT returns, usually quarterly, via Making Tax Digital compatible software
You can reclaim VAT paid on eligible business purchases
Your invoices need to show your VAT number and the VAT charged

How to Register

Register online via GOV.UK, or through your accountant. You'll need details of your business, turnover, and bank account. Once registered, you'll receive a VAT number and need Making Tax Digital compatible software to file returns.

Frequently Asked Questions

What is the VAT registration threshold?

£90,000 of VAT-taxable turnover in the previous 12 months, or if you expect to exceed that in the next 30 days.

Should I register for VAT voluntarily below the threshold?

Can be worthwhile if your customers are mostly VAT-registered businesses, or you have significant reclaimable VAT costs.

What changes once I'm VAT registered?

You charge VAT on sales, file VAT returns via Making Tax Digital software, and can reclaim VAT on business purchases.

What happens if I register late?

You may face a penalty and still owe HMRC the VAT you should have charged from your required registration date.

Sources & Methodology

GOV.UK: VAT registration

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