What is the UK VAT Registration Threshold?
The VAT registration threshold is the level of annual turnover above which a business must register for VAT with HMRC. As of 2026, this threshold is £90,000.
Key Points:
- • If your taxable turnover exceeds £90,000 in any 12-month period, you must register
- • If you expect your turnover to exceed £90,000 in the next 30 days alone, you must register
- • Registration is mandatory – HMRC can enforce penalties if you don't comply
- • You can register voluntarily below the threshold if it benefits your business
- • The threshold is reviewed periodically and adjusted for inflation
When Must You Register for VAT?
Mandatory Registration (Threshold Test)
You must register if your taxable turnover for any 12-month period exceeds £90,000. Once you cross this threshold, you're legally required to register immediately.
Future Turnover Test
If you can reasonably expect your turnover to exceed £90,000 in the next 30 days alone (e.g., a large contract), you must register even if your 12-month turnover is below threshold.
Automatic Deregistration
If your turnover drops below £90,000 and you expect it to stay below this level going forward, you can apply to deregister for VAT.
Benefits of Voluntary VAT Registration
Even if your turnover is below £90,000, registering for VAT can be beneficial in certain situations.
Claim Back VAT
Reclaim VAT on business expenses like equipment, software, and services – potentially saving thousands per year.
Credibility
Being VAT-registered can improve credibility with large business customers and government contracts.
B2B Sales
Selling to other VAT-registered businesses is often easier if you're also registered, as they can reclaim VAT.
Export Relief
VAT-registered exporters may qualify for zero-rated supplies, effectively rebating VAT on exports.
How to Register for VAT
Visit the HMRC Website
Go to gov.uk/register-for-vat to access the online registration service.
Gather Required Information
You'll need your National Insurance number, business bank details, and records of recent turnover.
Complete Online Form
Fill in the online VAT registration form with your business details and recent turnover figures.
Receive Confirmation
You'll receive a VAT number within a few days. You can then start charging and accounting for VAT.
VAT Threshold History
The VAT threshold has changed several times over the years, reflecting inflation and economic conditions.
| Period | Threshold | Notes |
|---|---|---|
| April 2024 – Present | £90,000 | First increase since 2017; raised in Spring Budget 2024 |
| April 2017 – March 2024 | £85,000 | Frozen for seven years |
| April 2016 – March 2017 | £83,000 | Up from £82,000 |
| April 2014 – March 2016 | £81,000 – £82,000 | Annual indexation pre-freeze |
What Happens If You Don't Register When Required?
Failing to register for VAT when required is a serious offence.
Penalties
HMRC can issue penalties ranging from 5% to 100% of unpaid VAT, depending on the severity of the breach.
Back-Dated VAT
You'll be liable to pay all VAT that should have been charged, plus interest at the statutory rate (currently around 8% per annum).
Prosecution
In serious cases of deliberate evasion, you could face prosecution and criminal penalties including imprisonment.
Business Impact
Your business reputation may suffer, and you might lose customer confidence. Large clients may refuse to work with unregistered suppliers.