UK VAT Registration Threshold 2026: When to Register

Quick answer: The UK VAT registration threshold is £90,000 of taxable turnover. You must register if your turnover over the last 12 months (a rolling period, not the tax year) goes over £90,000, or if you expect to exceed £90,000 in the next 30 days alone. Below the threshold, registration is voluntary.

For a growing sole trader or small company, the VAT registration threshold is one of the most important numbers to watch. Cross it without noticing, and you can end up paying VAT out of your own margin on sales you made months earlier. Register too early without thinking it through, and you may add 20% to prices for customers who cannot reclaim it.

This guide explains how the UK VAT registration threshold works in 2026, the two tests that trigger registration, what counts as taxable turnover, the deadlines, and what changes on your invoices once you are registered. It is general information, not tax advice. The rules below come from GOV.UK's guidance on when to register for VAT and its VAT thresholds page; check both, because the threshold can change at a Budget.

What is the UK VAT registration threshold in 2026?

Threshold	Amount	What it means
Registration threshold	More than £90,000	You must register if taxable turnover goes over this amount
Deregistration threshold	Less than £88,000	You can apply to cancel registration if you expect turnover below this in the next 12 months
Non-established businesses	No threshold	Overseas businesses making taxable supplies in the UK generally register from the first supply

The registration threshold rose from £85,000 to £90,000 on 1 April 2024, and the deregistration threshold from £83,000 to £88,000 at the same time. Older articles that still quote £85,000 are out of date.

The two tests: rolling 12 months and the next 30 days

Test 1: the rolling 12-month (historic) test

At the end of each month, add your VAT taxable turnover for that month to the previous 11 months. If the total is over £90,000, you must register within 30 days of the end of that month. Your effective date of registration is the first day of the second month after the month you went over.

GOV.UK's own example: if you go over the threshold on 15 July, you must register by 30 August, and your effective date is 1 September.

Test 2: the 30-day forward-look (future) test

If at any point you expect your taxable turnover in the next 30 days alone to go over £90,000, you must register by the end of that 30-day period. Here the effective date is the date you realised, not the date you actually crossed it. GOV.UK's example: if on 1 May you sign a contract worth £100,000 that will be invoiced within 30 days, you must register by 30 May, and your effective date is 1 May. This test catches a single large contract that would otherwise slip through the monthly check.

What counts as VAT taxable turnover?

VAT taxable turnover is the total value of everything you sell that is not exempt from VAT. In practice:

• Counts: standard-rated (20%) and reduced-rated (5%) sales, and zero-rated sales such as most books and children's clothing.
• Does not count: exempt supplies, such as most insurance, finance and some education and health services, and supplies outside the scope of UK VAT.
• Use the value before VAT. You are not charging VAT yet, so this is simply your sales figure.
• Count by business, not by activity. A sole trader's VAT registration covers all of their business activities, so add up taxable sales across every trade they run as a sole trader.

The difference between zero-rated and exempt sales matters here, because one counts and the other does not. Our guide to zero-rated vs exempt VAT explains the distinction. Services you supply to business customers abroad may be outside the scope of UK VAT under the place-of-supply rules, and our guide to the reverse charge on invoices covers how those are usually invoiced.

Worked example: when does a freelancer cross the VAT threshold?

These figures are illustrative. Alex is a UK freelance developer whose monthly invoiced turnover (all standard-rated services to UK clients) was £7,000 a month from July 2025 to March 2026, then rose with a new retainer.

Month end	Turnover that month	Rolling 12-month total	Over £90,000?
31 March 2026	£7,000	£84,000	No
30 April 2026	£9,000	£86,000	No
31 May 2026	£9,500	£88,500	No
30 June 2026	£9,500	£91,000	Yes

How the totals work: assume the 12 months to 31 March 2026 were twelve months of £7,000, so £7,000 x 12 = £84,000. Each new month adds the new figure and drops the month from a year earlier, which was £7,000. April: £84,000 + £9,000 - £7,000 = £86,000. May: £86,000 + £9,500 - £7,000 = £88,500. June: £88,500 + £9,500 - £7,000 = £91,000, which is over £90,000.

Alex went over the threshold in June 2026, so Alex must register by 30 July 2026, and the effective date of registration is 1 August 2026. From 1 August, every invoice must include 20% VAT. A £5,000 invoice to a client becomes £5,000 + (£5,000 x 20%) = £5,000 + £1,000 = £6,000.

If Alex had missed it and only registered in December 2026, the VAT would still be due from 1 August. If the August to November invoices totalled £38,000 and were issued without VAT, HMRC would generally treat them as VAT-inclusive, so the VAT due would be £38,000 x 1/6 = £6,333.33, paid out of Alex's own income unless clients agreed to pay extra. That is why it pays to check the rolling total every month, which you can do quickly with our sales tax and VAT calculator and a simple spreadsheet.

Temporary breaches and exceptions

Sometimes a business goes over the VAT registration threshold because of a one-off spike, such as a single large order or the sale of equipment, while its normal trade stays well below £90,000. In that case you can ask HMRC for an exception from registration. You still have to tell HMRC within the normal deadline, and you need to show that your taxable turnover in the next 12 months will not go over the deregistration threshold of £88,000. HMRC writes to confirm whether it accepts the exception; if it does not, it registers you.

A business whose taxable supplies are wholly or mainly zero-rated can also apply for exemption from registration, because it would usually be reclaiming more VAT than it charged. Again, HMRC must agree, and you should keep the evidence that supports your forecast. Do not simply assume you qualify and skip the application.

How to register for VAT

1. Check your turnover monthly. Keep a running 12-month total and note any big contracts coming up.
2. Register online. Most businesses register through HMRC's online service; form VAT1 is the postal alternative. You will need business details, turnover figures, bank details and the date you crossed the threshold.
3. Wait for your VAT number. HMRC writes to confirm your VAT registration number and effective date.
4. Adjust prices from the effective date. While waiting, you can raise prices to cover the VAT but cannot show VAT on invoices until the number arrives. Then issue proper VAT invoices.
5. Sign up for Making Tax Digital for VAT. VAT-registered businesses keep digital records and file VAT returns using compatible software.
6. Consider a scheme. The Flat Rate Scheme, cash accounting or annual accounting may simplify things for small businesses. Check eligibility and the current flat rate percentages on GOV.UK before you choose one.

What changes on your invoices after registering

Once registered, your invoices become VAT invoices. A full VAT invoice needs your VAT registration number, a unique invoice number, the invoice date, the time of supply if different, the customer's name and address, a description of each item, the VAT rate and the net, VAT and total amounts. Our VAT invoice guide lists every required field, and our guide to the tax ID on an invoice covers where the VAT number usually appears.

Our free UK invoice generator lets you add a VAT number and a VAT rate per line, and builds the invoice as a PDF in your browser. It does not register you for VAT, file VAT returns or send invoices for you. If you are still below the threshold, our guide to sole trader invoices in the UK covers what a non-VAT-registered invoice should show.

Should you register voluntarily?

Voluntary registration can make sense if most of your clients are VAT-registered businesses, because they can reclaim the VAT you charge, while you reclaim VAT on your own costs. It usually makes less sense if you sell mostly to consumers, who cannot reclaim VAT, because you either raise prices by 20% or absorb the tax. A consumer price of £120 that must now include VAT leaves you £120 / 1.2 = £100, not £120. Factor this into your pricing; our guide on how to set freelance rates can help.

Common mistakes with the VAT registration threshold

• Checking against the tax year. The test is a rolling 12 months, checked at every month end.
• Using £85,000. The threshold has been £90,000 since 1 April 2024.
• Leaving out zero-rated sales. They count towards taxable turnover.
• Including exempt or out-of-scope sales. They do not count, so including them can push you into registering early.
• Missing the 30-day forward test when a single large contract arrives.
• Showing VAT before you have a number. You cannot charge VAT on an invoice until you are registered and have the number.
• Confusing VAT with Income Tax. VAT registration is separate from your Self Assessment tax return, and from Making Tax Digital for Income Tax.

VAT threshold checklist

• Rolling 12-month taxable turnover updated at each month end
• Exempt and out-of-scope sales excluded; zero-rated sales included
• Large upcoming contracts checked against the 30-day test
• Registration deadline and effective date noted if you go over
• Prices and contracts reviewed for the 20% VAT impact
• Invoice template updated with VAT number and VAT lines
• Making Tax Digital compatible software chosen for VAT returns

This article is general information, not tax advice. VAT thresholds and rules can change at any Budget; check GOV.UK or speak to a qualified accountant about your business.