VAT registration threshold 2026: the £90,000 tests explained

The VAT registration threshold for 2026

The registration threshold is £90,000. It is not a turnover figure for your financial year or tax year. It is measured over a rolling period that moves forward every month.

There are two tests. The first looks back over the last 12 months. The second looks forward over the next 30 days. If either test is met, you must register. Check the current figure on GOV.UK before you rely on it, because the threshold can change.

Source: Register for VAT

Test 1: the rolling 12-month look-back

Keep a running total of your taxable turnover for the last 12 months. If it goes over £90,000, you must register within 30 days of the end of the month you went over. Checking at least monthly is a sensible habit.

Your registration takes effect from the first day of the second month after you went over.

GOV.UK gives this example. On 15 July your total taxable turnover for the last 12 months is £100,000. That is the first time it has gone over the threshold. You must register by 30 August. Your effective date of registration is 1 September.

A simple way to check is a spreadsheet with one row per month and a running 12-month total. Update it at least each month when you close your books.

Source: Register for VAT

Test 2: the 30-day look-forward

This test applies at any time, not just at a month end. If you expect your taxable turnover in the next 30 days alone to go over £90,000, you must register by the end of that 30-day period.

Here the effective date is earlier. It is the date you realised turnover would go over, not the date it actually went over.

GOV.UK gives this example. On 1 May you arrange a £100,000 contract to provide services, to be paid at the end of May. You must apply by 30 May. Your effective date of registration is 1 May.

This test usually matters for a single large contract or order. Ordinary steady growth is normally caught by the 12-month test first.

Source: Register for VAT

What counts as taxable turnover

Taxable turnover is the total value of everything you sell that is not VAT exempt or outside the scope of VAT. Zero-rated sales still count, even though no VAT would be charged on them.

VAT Notice 700/1 says you do not need to include the value of capital assets you have sold, such as buildings, equipment or vehicles. VAT exempt sales and out-of-scope income are also left out.

Source: Register for VAT

If you go over the threshold only temporarily

You may not have to register if your turnover went over the threshold in the last 12 months but you can show HMRC it will not go over the deregistration threshold in the next 12 months. This is called a registration exception.

It is not automatic. You must apply to HMRC and explain why the higher turnover was a one-off. Until HMRC accepts it, treat the normal deadline as still running. If turnover later falls for good, the separate VAT deregistration rules apply.

If all or most of your sales are zero-rated, you may not need to be registered. HMRC calls this exemption from registration, and you must apply for it.

Source: VAT Notice 700/1: should I be registered for VAT?

Registering voluntarily below £90,000

You can choose to register for VAT even if your taxable turnover is below £90,000. Some companies do this so they can reclaim VAT on their costs, or because their customers are VAT registered.

Once registered, you must charge VAT on taxable sales and send VAT returns, even if turnover stays low. Every VAT-registered company follows the Making Tax Digital for VAT record-keeping rules. VAT Notice 700/1 says you can apply for a voluntary registration to be backdated by up to 4 years from the date the business registers.

Source: VAT Notice 700/1: should I be registered for VAT?

What happens if you register late

If you register late, you must pay VAT on any sales you have made since the date you should have registered. This applies even if you did not charge your customers VAT, so the cost may come out of your own margin.

You may also have to pay a penalty, depending on how much you owe and how late your registration is. VAT Notice 700/1 says the penalty could be equal to the amount of VAT you should have paid.

VAT Notice 700/1 also says not to show VAT as a separate item on any invoice until you have your VAT registration number.

Source: Register for VAT

Common VAT threshold mistakes

Checking turnover only once a year at the year end. The 12-month test is rolling, so keep a running total and check it at least monthly.

Forgetting that zero-rated sales are part of taxable turnover.

Counting exempt or out-of-scope income, or the sale of a company van or computer. These do not count.

Mixing up the deadline and the effective date. Under the 30-day test, the effective date is the day you realised turnover would go over, which can be before you apply.

Ignoring the 30-day test when you win a large contract.

Source: VAT Notice 700/1: should I be registered for VAT?

Get help registering for VAT

If either test applies to your company, SimpleFilings can check your answers and prepare your company's VAT registration. Our £4.99 SimpleFilings service fee is separate from any VAT you owe. HMRC does not charge a fee to register. Starting with us does not itself meet the registration deadline, so begin well before it. For what HMRC asks for and what happens after you apply, see how to register a limited company for VAT.