Everything you need to know about registering for VAT in the United Kingdom — threshold, rates, steps, and deadlines.
Last updated: June 2026
You must register for VAT in the UK if your taxable turnover exceeds £90,000 in any rolling 12-month period. This is not the tax year — it is any consecutive 12-month window. If your revenue crosses £90,000 in, say, the period from March 2025 to February 2026, you must register even if your annual tax-year revenue is lower.
Taxable turnover includes sales at the standard rate (20%), reduced rate (5%), and zero rate (0%). It does not include VAT-exempt supplies such as insurance, education, or certain financial services. Zero-rated sales (food, most books, children's clothing, exports) count toward your threshold even though you charge 0% VAT on them.
Special cases: If you know your turnover will exceed £90,000 in the next 30 days alone — for example, you win a large contract — you must register immediately, before that 30-day period begins. You can also register voluntarily at any time below the threshold, which lets you reclaim VAT on business purchases.
The 5% reduced rate applies to domestic energy, energy-saving materials, children's car seats, and certain medical supplies. The zero rate applies to most food, children's clothing, books, newspapers, and exported goods.
Go to gov.uk/register-for-vat and sign in or create a Government Gateway account. You'll need your National Insurance number or company registration number, plus details about your business activities.
Fill in the online VAT registration form (VAT1). You'll need your business name and address, bank details, expected taxable turnover, and the date you exceeded (or expect to exceed) the threshold.
Most businesses use the standard scheme. Alternatives include the Flat Rate Scheme (fixed percentage of gross turnover, simpler), Cash Accounting Scheme (VAT based on payments received rather than invoices raised), and Annual Accounting Scheme (one return per year). Each has eligibility thresholds.
HMRC typically issues your VAT registration number within 10 working days. You must start charging VAT from your effective date of registration — you can backdate invoices once you receive the number.
Since April 2022, all VAT-registered businesses must use HMRC-approved software to keep digital records and file returns. You cannot use the old online portal. Popular options include Xero, QuickBooks, FreshBooks, and FreeAgent.
Filing: You file VAT returns quarterly (most businesses), monthly, or annually. Returns are due one month and seven days after the end of each VAT period. You must submit via Making Tax Digital (MTD) software — manual filing is not permitted.
Invoicing: All VAT invoices must show your VAT registration number, the date of supply, a sequential invoice number, a description of goods/services, the net amount, the VAT rate, and the VAT amount. Simplified VAT receipts are allowed for retail sales under £250.
Late registration penalties: If you register late, HMRC can charge a penalty of up to 15% of the VAT due from the date you should have registered. Under the new penalty regime (from January 2023), late filing and late payment each carry separate point-based penalties. It is always cheaper to register on time.
All taxable supplies count — standard-rated, reduced-rate, and zero-rated sales. VAT-exempt supplies (insurance, postage stamps, certain education services, financial services) do not count. Gross revenue before expenses, not profit, is what matters.
Yes. If you expect your taxable turnover to fall below £88,000 in the next 12 months (the deregistration threshold), you can apply to deregister. You must repay any VAT reclaimed on stock and assets still on hand at deregistration.
Goods exported from the UK are zero-rated, meaning you charge 0% but can still reclaim input VAT. Services sold to business customers (B2B) outside the UK are generally outside the scope of UK VAT, with the customer accounting for local tax. Digital services sold to EU consumers require registration in the EU via the OSS scheme.
The Flat Rate Scheme lets eligible businesses (turnover under £150,000 excluding VAT) pay a fixed percentage of gross turnover rather than calculating VAT on every transaction. The percentage depends on your business sector. It can simplify bookkeeping but is not always cheaper than the standard scheme.
Yes. Digital services sold to UK consumers are subject to UK VAT at 20%, regardless of where the seller is based. Foreign businesses selling digital products to UK customers must register for UK VAT if sales exceed £90,000 per year.
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