VAT Threshold 2025/26: When Do You Have to Register for VAT?

“Do I need to register for VAT yet?” is one of the most common questions growing businesses ask — and getting the answer wrong (registering late) can be costly. Here’s exactly how the VAT threshold works in 2025/26.

The £90,000 threshold

You must register for VAT once your VAT-taxable turnover exceeds £90,000. Two crucial details people miss:

It’s based on turnover (your sales), not profit.
It’s a rolling 12-month test — you check the last 12 months on an ongoing basis, not your accounting year.

So every month you should be looking back over the previous 12 months. The moment that rolling total crosses £90,000, the clock starts.

The two triggers to register

You must register if either:

Your VAT-taxable turnover exceeded £90,000 over the last rolling 12 months (you have 30 days from the end of the month you crossed it), or
You expect to exceed £90,000 in the next 30 days alone (register immediately)

Check your figures with our free VAT calculator and keep an eye on that rolling total as you grow.

What counts towards it

Your VAT-taxable turnover is broadly your total sales of goods and services that aren’t VAT-exempt or outside the scope of UK VAT. It’s the gross figure before expenses. Genuinely exempt sales (some financial, health and education services) don’t count.

Voluntary registration

You can register below £90,000 if you want to. Whether it’s worth it depends entirely on your customers:

Sell mainly to VAT-registered businesses? It can make sense — they reclaim the VAT you charge, and you reclaim VAT on your own purchases.
Sell to the public? Registering early usually just makes you 20% more expensive with no upside.

What changes once you register

Registering for VAT changes how you operate:

You charge VAT (usually 20%) on sales
You can reclaim VAT on business purchases
You file VAT returns, normally quarterly under Making Tax Digital
You pick a scheme — standard, Flat Rate, cash accounting or annual accounting — that suits your business

Don’t get caught out near the line

Missing the registration deadline means HMRC can backdate your registration and demand the VAT you should have charged — out of your own pocket. If you’re approaching £90,000, that’s the moment to get advice. Our VAT returns service and small business VAT support handle registration, scheme choice and your returns, and our small business accountants keep an eye on your turnover so you register at exactly the right time — not late.

Frequently asked questions

What is the VAT threshold for 2025/26?

The VAT registration threshold is £90,000 of VAT-taxable turnover. You must register if your turnover exceeds £90,000 in any rolling 12-month period, or if you expect to exceed it in the next 30 days alone. The deregistration threshold is £88,000.

When do I have to register for VAT?

You must register within 30 days once your VAT-taxable turnover passes £90,000 over any rolling 12 months, or as soon as you expect to cross it within the next 30 days. It's based on turnover (sales), not profit, and it's a rolling period — not your accounting year.

What counts towards the VAT threshold?

Your VAT-taxable turnover — broadly your total sales of goods and services that aren't VAT-exempt or outside the scope of UK VAT. It's the gross sales figure, before expenses. Exempt sales (like certain financial or health services) don't count towards it.

Can I register for VAT voluntarily below the threshold?

Yes. Voluntary registration can be worthwhile if you sell mainly to other VAT-registered businesses (who reclaim the VAT) or have a lot of reclaimable input VAT on purchases. If you sell to the public, it usually just makes you 20% more expensive, so it's rarely worth it.

What happens when I register for VAT?

You start charging VAT (usually 20%) on your sales, can reclaim VAT on business purchases, and must file VAT returns — normally quarterly under Making Tax Digital, using compatible software. You also choose a VAT scheme (standard, Flat Rate, cash accounting or annual accounting).

Related services

Reviewed by Provense Accountants

Written and reviewed by our team of qualified accountants (AAT-regulated). This guide is general information, not personal tax advice — book a free consultation for advice on your situation.