VAT registration: the £90,000 threshold explained

The VAT registration threshold is £90,000 of taxable turnover. The detail that trips people up: it is measured over any rolling 12-month period — not your accounting year or the tax year. A strong summer can push you over the line without you noticing.

When you must register

Register late and HMRC can backdate your registration — meaning you owe VAT on sales you have already made, even though you never charged it to your customers. Penalties on top can make this an expensive mistake.

• You exceeded £90,000 of taxable turnover in the last 12 months — register within 30 days of the end of that month
• You expect to exceed £90,000 in the next 30 days alone — register within 30 days

Voluntary registration: when it pays

You do not have to wait for the threshold. If your customers are mainly VAT-registered businesses, voluntary registration lets you reclaim VAT on your costs without affecting your prices. If your customers are the public, registration below the threshold usually makes you more expensive. The right answer depends on your numbers — it is a 10-minute conversation.

Choosing the right scheme

All VAT-registered businesses must also follow Making Tax Digital for VAT: digital records and returns filed through compatible software. We set up your software, choose the right scheme with you, and file your returns at a fixed quarterly fee.

• Standard scheme — account for VAT per invoice
• Flat Rate Scheme — simplified percentage of turnover, popular with small service businesses
• Cash Accounting — pay VAT when you are paid, not when you invoice