What Is the VAT Threshold and When Do You Need to Register?

If you run a business in the UK, VAT is something you’ll hear about quite early on.

But many business owners are not clear on when they actually need to register.

Here’s a simple explanation.

What is VAT?

VAT (Value Added Tax) is a tax you charge on most goods and services you sell.

Once you are VAT registered, you:

• Charge VAT to your customers

• Submit VAT returns to HMRC

• Can usually reclaim VAT on business expenses

What is the VAT threshold?

The VAT registration threshold is the point where your business must register for VAT.

In the UK, the current threshold is:

• £90,000 taxable turnover in a rolling 12-month period

This means it’s not based on your tax year or accounting year.

It’s based on your last 12 months of sales at any point in time.

When do you need to register for VAT?

You must register for VAT if either:

• Your total taxable turnover for the last 12 months goes over £90,000 (the VAT  threshold)

• You expect to go over £90,000 in the next 30 days alone

Once you cross the threshold, you usually need to register within 30 days.

Final Thought

The VAT threshold isn’t complicated, but it is easy to miss if you’re not tracking it.

A quick monthly check of your turnover can help you avoid unexpected VAT bills and keep your business compliant.

If you’re unsure whether you need to register or want help keeping on top of your VAT position, we’re always happy to help!

Jugmeet Kaur, 17 July 2026