What is the VAT threshold?

The VAT registration threshold is £90,000 of taxable turnover in any rolling 12-month period. The de-registration threshold is £88,000.

What happens if I register for VAT late?

You must pay the VAT you should have charged from the date you should have been registered, and HMRC can add a penalty depending on how late you were and how much is owed.

Do I have to charge VAT as soon as I go over the threshold?

You charge VAT from your effective date of registration. Under the looking-back test, that is the first day of the second month after you went over the threshold.

When do you start paying VAT?

You charge VAT on your sales from your effective date of registration and pay it to HMRC through your VAT returns. The first return and payment are due 1 calendar month and 7 days after the end of your first VAT period.

How long does VAT registration take?

HMRC's processing time varies, and GOV.UK publishes the current times. HMRC sends your VAT number, your effective date of registration and the date of your first return. While you wait, you cannot show VAT on invoices but you can raise your prices to cover it.

What is my VAT registration date?

It is your effective date of registration, the date you start charging VAT. Under the looking-back test it is the first day of the second month after you went over the threshold. Under the looking-forward test it is the date you realised you would go over.

When Does a Small Business Have to Register for VAT?

By Trust Ledger Accounting. Figures checked against GOV.UK and last updated on 15 October 2026.

When do I have to register for VAT? When your taxable turnover goes over £90,000 in any rolling 12 months, and you must register within 30 days of the end of the month in which you went over.

You must also register if you expect turnover to go over £90,000 in the next 30 days alone, for example because one large contract is about to be paid. In that case you register by the end of that 30-day period.

The two tests

Test	When you must register	When registration takes effect
Looking back	Within 30 days of the end of the month when the last 12 months' taxable turnover went over £90,000	The first day of the second month after you went over
Looking forward	By the end of the 30-day period in which you expect to go over £90,000	The date you realised, not the date turnover went over

Source: GOV.UK, register for VAT.

If you go over the threshold only temporarily, you can ask HMRC for a registration exception. That application has to be made by post on form VAT1.

Worked example: your VAT registration date

Turnover for the last 12 months first goes over £90,000	15 July
Deadline to register with HMRC	30 August
Effective date of registration	1 September
You charge VAT on sales from	1 September

This is the example GOV.UK uses. HMRC then confirms your first VAT period, and the first return and payment are due 1 calendar month and 7 days after that period ends.

Invoicing while you wait for your VAT number

You cannot show VAT on an invoice until HMRC gives you a VAT registration number, but you still owe VAT from your effective date. GOV.UK's advice is to raise your prices by the 20% you will owe, tell customers why, and reissue those invoices showing VAT once your number arrives. VAT-registered customers can then reclaim it. HMRC's current processing times are on its page check when you can expect a reply from HMRC.

What counts as taxable turnover

Taxable turnover is the total value of everything you sell that is not exempt from VAT. It is measured over any rolling 12 months, not your financial year or the calendar year, so it needs checking every month as you get close.

Registering voluntarily

A business below the threshold can choose to register. It often makes sense when:

Your customers are VAT-registered businesses, who can reclaim the VAT you charge
You have significant costs that carry VAT, which you could then reclaim
You expect to cross the threshold soon anyway

It is usually less attractive if you sell to the public, because your prices effectively rise by 20% or your margin falls.

After you register

Charge VAT on your sales and show your VAT number on invoices
Keep digital records and file returns through Making Tax Digital software
File a return, usually every quarter, due 1 calendar month and 7 days after the period ends
Consider a scheme. The Flat Rate Scheme is open to businesses with VAT-exclusive turnover of £150,000 or less, and Cash Accounting to those with taxable turnover of £1.35 million or less.

You can ask to de-register if taxable turnover falls below £88,000.

We prepare and submit VAT returns for £60 + VAT a quarter, and quarterly returns are included in our Standard and Complete packages.

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