The UK VAT registration threshold — the rolling 12-month turnover figure above which HMRC requires you to register — remained at £90,000 for the 2026/27 tax year, after the increase from £85,000 announced in the Spring Budget 2024. The deregistration threshold stayed at £88,000.
How the rolling test actually works
HMRC does not look at your calendar year or accounting year. At the end of every month, add up VAT-taxable turnover from the previous 12 months. If that total exceeds £90,000, you must register within 30 days of the end of that month, and your effective registration date is the first day of the second month after you cross the line.
There is also a future test: if you reasonably expect taxable turnover in the next 30 days alone to exceed £90,000 (one big contract, for example), you must register immediately.
What counts toward the threshold
- Standard-rated, reduced-rate and zero-rated sales
- Goods you hire or loan to customers
- Business goods used for personal reasons
- Goods or services bartered, part-exchanged or given as gifts
Exempt sales (insurance, finance, postage stamps, healthcare) and sales outside the scope of UK VAT do not count.
Planning around the threshold
- Track monthly, not quarterly. Most accounting software shows the rolling 12-month total on the dashboard — pin it.
- Decide before you cross. Registering voluntarily a month early avoids the scramble for invoice templates, accounting setup and Making Tax Digital filing.
- Plan the price impact. If your customers are consumers (not VAT-registered businesses), you absorb the 20% or pass it on. Model both scenarios.
- Consider the Flat Rate Scheme. For turnover under £150,000, you pay a flat percentage of gross sales and keep the difference — simpler bookkeeping, sometimes a small cash benefit.
What changes the day you register
- Add VAT to every taxable invoice from your effective date.
- Issue VAT invoices that meet HMRC's content rules.
- File quarterly returns under Making Tax Digital using compatible software.
- Reclaim input VAT on purchases — including, in many cases, VAT on goods bought up to 4 years before registration that you still hold.
Use our UK VAT calculator to model gross/net prices once you register, and the VAT for businesses guide for the wider compliance picture.