VAT registration: when you need to register and how it works

VAT registration becomes compulsory once your business passes the VAT threshold, and it can sometimes make sense to register earlier. This guide explains the threshold, how to check whether you have passed it, the choices you make when you register, and what changes afterwards.

You must register for VAT if your VAT-taxable turnover goes over **£90,000** in any rolling 12-month period, or if you expect it to go over £90,000 in the next 30 days alone. The threshold applies from 1 April 2024. Taxable turnover includes standard-rated, reduced-rated and zero-rated sales. It does not include exempt sales.

The test is a rolling 12 months, not your accounting year or the tax year. At the end of each month, add up your taxable turnover for the last 12 months. If the total is over £90,000, you must register within 30 days of the end of that month. There is also a forward-looking test. If you expect your taxable turnover in the next 30 days alone to go over £90,000, for example because of one large contract, you must register straight away.

You can register before you reach the threshold. It can make sense if: - Your customers are mostly VAT-registered businesses, who can reclaim the VAT you charge - You have significant set-up costs and want to reclaim the VAT on them - You make mainly zero-rated sales, so you would usually receive repayments It is usually less attractive if most of your customers are consumers, who cannot reclaim VAT and would see your prices rise.

- **Accounting scheme:** standard accounting, cash accounting or the Flat Rate Scheme, depending on your turnover, margins and how you are paid - **Return periods:** usually quarterly, with an option to align them with your year end - **Effective date:** the date from which you must charge VAT, which may be backdated if you registered late

- You charge VAT on your taxable sales and issue VAT invoices - You can reclaim VAT on business purchases, with the right evidence - You keep digital records and file returns through Making Tax Digital software - HMRC may check your first returns, especially if they show a repayment

If you should have registered earlier, HMRC will backdate your registration and you will owe the VAT you should have charged from that date, even if you did not charge it to customers. A penalty may also apply. It is better to deal with this as soon as you spot it.

If your taxable turnover falls below £88,000, you can usually apply to cancel your registration.

We check whether and when you need to register, compare the schemes against your figures, and handle the registration, returns and any HMRC checks. See our [VAT services](/vat). For HMRC's own guidance, see [Register for VAT on GOV.UK](https://www.gov.uk/register-for-vat).