The UK VAT registration threshold is £90,000 for the 2026/27 tax year - measured against your rolling 12-month taxable turnover, not your accounting year. Cross it and you must register within 30 days.
The UK VAT registration threshold is £90,000 for the 2026/27 tax year. You must register if your taxable turnover over any rolling 12-month period exceeds £90,000, OR if you expect it to exceed £90,000 in the next 30 days alone. The deregistration threshold is £88,000.
Rolling 12-month taxable turnover. Register within 30 days of crossing.
Optional deregistration if next-12-month forecast turnover falls below.
Authoritative source: gov.uk - VAT registration thresholds
This is the single most misunderstood part of VAT registration - and the reason most late-registration penalties happen. The threshold test is not "did I exceed £90,000 in my accounting year". It is a continuously-moving 12-month window ending on whatever date you are testing.
At the end of every calendar month, you must check: did your taxable turnover for the preceding 12 months exceed £90,000? If yes, you must register within 30 days of the end of that month, with effect from the first day of the following month after that.
Worked example: Your rolling-12-month turnover hits £91,000 at the end of October 2026. You must notify HMRC by 30 November 2026. Your VAT registration is effective from 1 December 2026.
Separately, if at any point you reasonably expect your taxable turnover in the next 30 days alone to exceed £90,000, you must register immediately - with effect from the date that expectation arose.
Worked example: On 1 March 2027 you win a contract that will pay £100,000 in March alone. You must register with effect from 1 March 2027, even though your annual turnover before that was modest.
The zero-rated trap catches food retailers, children's clothing sellers, and book publishers most often: their sales bear 0% VAT but still count toward the threshold. Crossing £90,000 of zero-rated sales still requires VAT registration.
The VAT deregistration threshold is £88,000 for 2026/27. You may apply to deregister if you can demonstrate that your taxable turnover over the next 12 months will fall below £88,000. HMRC will not compulsorily deregister you simply because you fall below it - you have to apply.
Voluntary registration is worth considering if you sell mostly to other VAT-registered businesses (B2B), as they can reclaim the VAT you charge. It also lets you reclaim VAT on your own purchases. The downside: it adds compliance burden and can make you 20% more expensive to non-VAT-registered customers. For B2C businesses below the threshold, voluntary registration is usually counterproductive.
HMRC charges a penalty of between 5% and 15% of the VAT due from the date you should have been registered, plus interest. You are also liable for VAT on every sale from the effective registration date - even if you did not charge VAT to those customers. The earlier the late-registration is corrected, the smaller the penalty.
The threshold can change at each Budget. It was raised from £85,000 to £90,000 in April 2024 and remains at £90,000 for 2026/27. We review and update this page each 6 April. For the authoritative current figure, check gov.uk/vat-registration-thresholds.
Most newly-registered SMEs use Standard VAT Accounting (claim/charge on invoice date). Cash Accounting (claim/charge on payment date) can ease cash-flow for businesses with slow-paying customers. The Flat Rate Scheme can simplify compliance for very small businesses with low VAT-recoverable expenses, but the rates have tightened in recent years. The right scheme depends on your sector, customer profile, and recoverable expense ratio - we can advise on which fits.
Every answer above is anchored to specific UK legislation. Below are the primary sources.
Primary Act: Value Added Tax Act 1994 (c. 23) - Schedule 1, paragraph 1 (liability to be registered)
Current threshold figure: Value Added Tax (Increase of Registration Limits) Order 2024 (SI 2024/305) - sets the £90,000 registration and £88,000 deregistration thresholds
HMRC guidance: VAT Notice 700/1 - Who should register for VAT
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