What is the UK VAT registration threshold?

As of 1 April 2024 it's £90,000 of VAT-taxable turnover in any rolling 12-month period. You must also register if you expect to exceed it in the next 30 days alone. Thresholds change, so confirm the current figure on GOV.UK.

Is VAT based on profit or turnover?

Turnover — specifically your VAT-taxable turnover, meaning total sales that aren't exempt or outside the scope of VAT. It is not based on profit, which is why watching only your bank balance is risky.

Can I register for VAT voluntarily?

Yes. It often makes sense if your clients are VAT-registered businesses and you have VAT to reclaim on purchases, and less sense if you sell mainly to consumers who can't reclaim it. Weigh it for your specific client mix.

What happens if I go over the threshold and don't register?

You're still liable for the VAT you should have charged, and HMRC can charge penalties and interest. Because you probably didn't add VAT to those sales, it can come out of your own pocket — which is why monitoring your rolling turnover matters.

Does registering change my invoices?

Yes. Registered businesses must issue VAT invoices showing the VAT number, the rate and amount of VAT, and other required fields. See our UK VAT invoices guide for the complete checklist.

Do I Need to Register for VAT? (UK Threshold Explained)

The Short Answer

In the UK, you must register for VAT once your VAT-taxable turnover goes over the registration threshold in any rolling 12-month period — or if you expect to cross it in the next 30 days alone. As of 1 April 2024 that threshold is £90,000. Below it, registration is optional.

Thresholds and rules change, and your circumstances may differ. Treat this as a plain-English overview, not tax advice — confirm the current figures on GOV.UK or with an accountant before you act.

"VAT-taxable turnover" means the total of everything you sell that isn't exempt or outside the scope of VAT — not your profit. It's a common and expensive mistake to watch your bank balance instead of your rolling turnover.

How the Rolling 12-Month Test Works

The threshold isn't measured against your tax year or calendar year. It's a rolling window: at the end of every month, you look back at the previous 12 months of taxable turnover. The moment that total exceeds the threshold, the clock starts and you must register (generally within 30 days).

There's also a forward-looking test: if you realistically expect your taxable turnover to exceed the threshold in the next 30 days on its own — say you've just signed one large contract — you must register straight away, even though your trailing 12 months are still under.

Track your rolling 12-month turnover monthly once you're within striking distance of the threshold. Crossing it unnoticed means you may owe VAT on sales you never charged it on — out of your own pocket.

What Changes Once You're Registered

Registration turns you into a VAT collector for HMRC. Three things change:

You add VAT to your prices. Most goods and services are standard-rated (20%), but some are reduced-rate (5%), zero-rated, or exempt. You charge the correct rate and show it on every invoice — our VAT calculator handles adding or removing VAT at any rate.
Your invoices must become VAT invoices. That means showing your VAT registration number, the VAT rate and amount per line or in total, and the other required fields. See our UK VAT invoices guide for the full list.
You reclaim VAT on purchases. The VAT you pay on legitimate business costs (your "input tax") can usually be offset against the VAT you collect, and you file a VAT return — now generally digitally under Making Tax Digital.

Should You Register Voluntarily?

You can register before you hit the threshold, and for some businesses it's a smart move. It comes down to who your customers are and what you buy.

Voluntary registration tends to help if your clients are themselves VAT-registered businesses (they reclaim the VAT you charge, so your prices don't really rise for them) and you have meaningful VAT on your own purchases to reclaim. It can also make a small business look more established.
It tends to hurt if you sell mainly to consumers or non-registered businesses, who can't reclaim VAT — adding 20% either makes you pricier or eats your margin. It also adds admin: returns, records, and deadlines.

There's no universally right answer. Run the numbers for your specific client mix, or ask an accountant to — it's the kind of question they'll answer quickly and cheaply.

If You're Below the Threshold and Not Registered

You simply don't charge VAT, and you can't reclaim it on your purchases. On your invoices, it's good practice to make this explicit rather than leaving the tax line blank — a short note such as "No VAT charged — not VAT registered" stops clients wondering whether you forgot.

You still need to keep proper records of your income and expenses for your Self Assessment, and you still need to watch that rolling turnover so registration doesn't sneak up on you.

A Quick Word for Non-UK Readers

If you're outside the UK, the concept is similar but the numbers and names differ. Australia uses GST with a registration threshold of $75,000 turnover. Canada has a GST/HST "small supplier" threshold (commonly cited at $30,000). Many EU countries have their own VAT thresholds, some far lower than the UK's. The US has no VAT at all — it uses state-level sales tax instead, which works very differently (our US sales tax guide covers it).

Whatever your country, the principle holds: there's usually a turnover line above which registration becomes mandatory, and crossing it changes what your invoices must show. Check your own tax authority for the current figure.