VAT Registration: A Complete Guide for UK Businesses
Understand when you need to register for VAT in the UK, the £90,000 VAT registration threshold, what counts as taxable turnover, registration deadlines, voluntary VAT registration and how to register with HMRC.
Do you need to register for VAT?
Enter your turnover figures for an initial indication of whether VAT registration may be required.
Your taxable turnover for the previous 12 months is above the current £90,000 VAT registration threshold for a UK-established business.
Register for VATThis checker provides general guidance only. VAT registration can depend on the nature and place of your supplies and other circumstances.
1. What Is VAT Registration?
VAT registration is the process of registering a business or organisation with HM Revenue & Customs (HMRC) for Value Added Tax.
Once registered, a business will normally charge VAT on taxable sales where appropriate, keep VAT records, submit VAT returns and account to HMRC for VAT due, subject to the normal VAT rules.
A business can make little or no profit and still become liable to register if its VAT taxable turnover exceeds the registration threshold.
2. Who Needs to Register for VAT?
VAT registration can apply to different forms of business and organisation where taxable supplies are being made in the UK.
Limited companies
Companies making taxable supplies may need to register when the VAT threshold is exceeded.
Sole traders
VAT registration is based on the business's taxable turnover, not its profit.
Partnerships
Partnerships making taxable supplies can also become liable to register.
Other organisations
Clubs, charities and other organisations may need to register where the VAT rules apply.
3. What Counts as VAT Taxable Turnover?
VAT taxable turnover is broadly the total value of the supplies you make that are not exempt from VAT or outside the scope of UK VAT.
Zero-rated does not mean exempt. Zero-rated taxable supplies generally count towards the VAT registration threshold even though VAT is charged at 0%.
4. The UK VAT Registration Threshold
A UK-established business must normally register when its taxable turnover for the previous 12 months goes over £90,000.
This is a rolling test. It does not restart at the beginning of your accounting year or tax year, so taxable turnover should be monitored continuously.
5. When Do You Need to Register for VAT?
Previous 12 months
If taxable turnover for the previous 12 months goes over £90,000, you normally need to notify HMRC within 30 days of the end of the month in which the threshold was exceeded.
Effective registration date:Normally the first day of the second month after the threshold was exceeded.
Next 30 days alone
If you realise that taxable turnover will go over £90,000 in the next 30 days alone, you generally need to notify HMRC by the end of that 30-day period.
Effective registration date:The date you first expected the threshold to be exceeded.
6. Voluntary VAT Registration
Businesses below the compulsory VAT threshold can choose to register voluntarily where they meet the relevant conditions.
Voluntary VAT registration can sometimes allow a business to recover eligible VAT on business costs, but registration also introduces ongoing VAT compliance and record-keeping responsibilities.
The commercial impact depends on your customers, pricing, expenses and the VAT treatment of your supplies. Registration is not automatically beneficial simply because it is available.
7. How to Register for VAT with Experlu
Use Experlu's fixed-fee VAT registration service to have your application reviewed, prepared and submitted by an Experlu Expert.
Tell us about your business
Provide your business details, activities and the information relevant to your VAT registration.
Buy the fixed-fee service
Complete checkout and answer the VAT registration questions online.
Expert prepares your application
An Experlu Expert reviews your information and prepares the VAT registration application.
Submitted to HMRC
Your application is submitted to HMRC and you are kept updated on the registration.
8. What Happens After VAT Registration?
HMRC will issue your VAT registration details when the application is accepted. From the effective date of registration, the business must deal correctly with VAT on its taxable transactions.
- Keep appropriate VAT records.
- Issue VAT invoices where required.
- Charge the correct VAT rate on taxable sales.
- Maintain records using appropriate VAT-compatible software where required.
- Submit VAT returns and pay VAT due to HMRC by the applicable deadlines.
9. VAT Registration for Overseas Businesses
Different VAT registration rules apply to businesses that are not established in the UK.
A non-established taxable person making taxable supplies in the UK can be required to register regardless of the normal £90,000 threshold. Whether a registration obligation arises depends on factors such as the type of supply, where the supply is treated as taking place and whether a reverse-charge rule applies.
Do not use the £90,000 threshold alone. If your business is based outside the UK and makes or intends to make UK supplies, check the overseas VAT rules before assuming registration is unnecessary.
10. Common VAT Registration Mistakes
- Monitoring annual turnover rather than taxable turnover on a rolling 12-month basis.
- Leaving zero-rated sales out of taxable turnover when assessing the registration threshold.
- Waiting until the end of the financial year before checking whether the VAT threshold has been exceeded.
- Ignoring the separate next-30-days VAT registration test.
- Assuming an overseas business has the same £90,000 registration threshold as a UK-established business.
- Registering without considering the VAT treatment of the business's sales and purchases.
11. VAT Registration FAQs
What is the VAT registration threshold?
For a UK-established business, compulsory VAT registration is generally required when taxable turnover for the previous 12 months goes over £90,000, or when you expect taxable turnover to go over £90,000 in the next 30 days.
Can I register for VAT if my turnover is below £90,000?
Yes. A business making or intending to make taxable supplies may be able to register voluntarily even if its taxable turnover is below the compulsory registration threshold.
Does zero-rated turnover count towards the VAT threshold?
Yes. Zero-rated supplies are taxable supplies and are generally included when calculating VAT taxable turnover.
Do VAT-exempt sales count towards the registration threshold?
VAT-exempt supplies are generally excluded from taxable turnover when assessing the normal VAT registration threshold.
Is the £90,000 threshold based on the tax year?
No. The historic test looks at taxable turnover over a rolling 12-month period, so businesses should monitor turnover continuously rather than only at the financial or tax year end.
Do overseas businesses have the £90,000 VAT threshold?
Not necessarily. A non-established business making taxable supplies in the UK can be required to register regardless of turnover, subject to the detailed place-of-supply and other VAT rules.
12. Register for VAT with Experlu
Buy the fixed-fee VAT registration service online and an Experlu Expert will review your information, prepare your application and submit it to HMRC.