For a UK-established business, compulsory VAT registration normally starts when VAT-taxable turnover goes over £90,000 in a rolling 12-month period, or you expect more than £90,000 in the next 30 days alone. This is based on turnover, not profit, and it does not wait for the end of your tax year.

See the end of year Self Assessment report or explore quarterly reports.

What counts towards the threshold?

VAT-taxable turnover is the total value of sales that are not exempt from VAT. Zero-rated sales generally count; exempt sales generally do not. There are special rules for some transactions and businesses, including those not established in the UK. Use HMRC guidance if your sales mix is unusual.

If sales are £95,000 and allowable business expenses are £40,000, profit of £55,000 does not keep you below a £90,000 turnover threshold.

The rolling 12-month test

At each month end, add the relevant sales for the last 12 months. Drop the oldest month and add the newest. You are checking a moving period, rather than resetting the total every April or at your accounting year end.

For example, taxable turnover of £92,000 for the 12 months ending 31 October 2026 crosses the normal threshold even if the current tax-year total is lower.

When must you register after crossing it?

For the backward-looking test, register within 30 days of the end of the month in which you exceeded the threshold. The normal effective registration date is the first day of the second month after that month.

Using the October example, registration is due by 30 November 2026 and the usual effective date is 1 December 2026. A genuinely temporary breach may have an exception, but you must follow HMRC’s process rather than deciding for yourself.

The separate next-30-days test

If you realise taxable turnover will exceed £90,000 in the next 30 days alone, registration is required under a different rule. Register by the end of that period; the effective date is normally the date you realised the threshold would be exceeded.

For example, a large contract expected to generate £100,000 of taxable sales within the coming 30 days can trigger registration without waiting for 12 months of trading.

Can you register voluntarily?

Yes, eligible businesses below the threshold can choose to register. It may help where customers can recover VAT and you have significant recoverable input VAT. It can also increase administration and affect prices for consumers who cannot reclaim VAT. Compare the effect on your actual customers and costs before deciding.

What changes after registration?

• Work out the correct VAT treatment of your sales.
• Use appropriate VAT invoices and maintain VAT records.
• Submit VAT returns and pay VAT under the applicable rules.
• Check MTD for VAT requirements and any relevant exemptions.
• Review customer pricing and cash flow before the effective date.

If you register late, VAT can still be due from the correct effective date. Contact HMRC or an adviser promptly rather than assuming registration only affects future invoices.

VAT and MTD for Income Tax are different

Being below the VAT threshold does not mean MTD for Income Tax cannot apply. Its qualifying-income thresholds and reference years are different. Use the Income Tax MTD checker and read the MTD guide.

Keep an eye on turnover before it becomes urgent

Review sales monthly and retain the transactions behind your totals. Our profit guide explains the difference between sales, costs and profit. TaxSnapper is aimed at straightforward non-VAT-registered sole traders and is not a full VAT accounting system. Arrange suitable software or advice if VAT becomes relevant.

Sources and further help

Checked 25 October 2026. When to register for VAT · Calculating VAT turnover · VAT records. Guidance for straightforward sole traders; individual circumstances can change the answer.