VAT registration is one of the biggest milestones for a growing business. Register too late and you can face penalties and a bill for VAT you never charged. Register at the right time and with the right scheme, and it can be simple.
The registration threshold
You must register for VAT if your VAT taxable turnover goes over £90,000 in any rolling 12-month period. That is not your tax year or your accounting year: check the last 12 months at the end of every month.
You must also register straight away if you expect your turnover to go over the threshold in the next 30 days alone.
Deadlines once you go over
If your rolling turnover passes the threshold, you must register within 30 days of the end of the month in which you went over. Your registration usually takes effect from the first day of the second month.
Should you register voluntarily?
Registering below the threshold can make sense if most of your customers are VAT-registered businesses, or if you buy a lot of equipment and want to reclaim the VAT. It is usually less attractive if you sell mainly to the public.
Choosing a scheme
- Standard accounting: charge and reclaim VAT on each invoice
- Cash accounting: pay VAT when your customers pay you
- Flat Rate Scheme: pay a fixed percentage of turnover, which can save time for smaller businesses
We can check your figures, tell you when you need to register and recommend the scheme that leaves you better off.
Thresholds and rules can change. Always check the latest guidance on GOV.UK.