UK VAT Registration Threshold Calculator

£90,000 of taxable turnover in any rolling 12-month period. Deregistration threshold is £88,000.

The figure rose from £85,000 on 1 April 2024 and applies to all of the UK. Taxable turnover means standard, reduced, and zero-rated supplies — exempt supplies are excluded. The threshold is reviewed at every Budget and changes take effect on the date HMRC announces, usually the start of a new tax year.

The most recent 12 calendar months ending on the last day of the current month — not a fixed accounting year.

At the end of every month, add up taxable sales for the previous 12 months. The moment that running total passes £90,000, you must register within 30 days. The clock starts the day you crossed the line, not the day you noticed. Track it monthly in a rolling spreadsheet column to avoid surprises.

If you reasonably expect to exceed £90,000 in the next 30 days alone, you must register immediately.

The rule catches one-off large contracts — a builder signing a £100,000 deal triggers it the day of signing. Forward-looking registration takes effect from the day the expectation arose. The two threshold tests run in parallel — you can be caught by either even if the other says you are safe.

Yes. Taxable turnover includes standard, reduced, and zero-rated supplies.

A bookshop selling only zero-rated books still has to register if turnover passes £90,000. Exempt supplies do not count — insurance, education, financial services, and most healthcare are outside the test. Sales outside the UK and sales of capital business assets are also excluded. Use your sales records, not the accounting profit and loss.

HMRC backdates registration, charges VAT on every taxable sale since then, and adds a failure-to-notify penalty plus interest.

The penalty ranges from 0% to 100% of the VAT owed, depending on whether the failure was deliberate and whether disclosure was unprompted. The best mitigation is unprompted disclosure as soon as you spot the breach — penalty rates drop sharply. Get an accountant's letter of engagement before contacting HMRC if amounts are large.

Yes — sensible if most customers are themselves VAT-registered, since they can reclaim the VAT you charge.

You gain the ability to reclaim input VAT on rent, equipment, and stock at no net cost to anyone. For B2C businesses, voluntary registration adds 20% to prices and rarely pays. Rule of thumb: if more than 60% of your customers are VAT-registered, voluntary registration usually saves money.

Voluntarily if expected taxable turnover for the next 12 months will stay under £88,000. Mandatorily on business closure or legal-entity change.

Notify HMRC within 30 days using form VAT7 online. The decision is generally irreversible for at least 12 months unless circumstances change. Final VAT on business assets above £1,000 in total VAT must be accounted for on the final return — this catches stockpilers.

Per legal entity — but HMRC can aggregate connected businesses if it suspects splitting.

Two sole-trader activities run by the same person are typically added together. A limited company and its sole-trader owner are usually separate, but HMRC can issue a "direction" treating them as one if activity is artificially split. Document any genuine separation: separate bank accounts, separate insurance, separate branding. Get a registered accountant's view before splitting.

30 days from the end of the month in which you crossed under the rolling test. Immediate under the 30-day rule.

Under the rolling test: if you cross on 12 October, the deadline is 30 November and the effective registration date is 1 December. Under the 30-day forward-looking test, the effective date is the day the expectation arose. Late registration triggers a failure-to-notify penalty plus back-dated VAT and interest.

Total sales of standard, reduced, and zero-rated supplies in the UK — gross of VAT is not the issue since you should not be charging VAT yet.

Exclude exempt supplies, sales outside the UK, sales of business assets, and supplies between branches of the same legal entity. For mixed businesses, only the taxable portion counts. Cash-basis and accrual-basis users should both total invoices issued, not cash received, for the threshold check.

No. Compare net (VAT-exclusive) taxable turnover against the £90,000 threshold.

If you are already charging VAT (because you registered voluntarily), strip it out before doing the threshold check — otherwise you double-count. The figure on each sales invoice is the net amount used for the rolling total. Goods sold under the second-hand margin scheme are tested on full selling price, not the margin — this catches some used-car dealers off guard.

Each separate legal entity has its own threshold. Two sole-trader activities by the same person are added together.

A sole trader and a limited company are usually distinct. HMRC has powers to combine connected businesses where it believes activity is artificially split. Red flags include shared premises, shared staff, identical customer lists, and overlapping pricing. Document any genuine separation: separate bank accounts, separate insurance, separate branding, separate marketing.