A limited company must register for VAT once its taxable turnover goes over £90,000 in any rolling 12-month period — or as soon as it expects to exceed £90,000 in the next 30 days alone. When you cross the threshold on the rolling test, you must register within 30 days of the end of the month you went over. The figure that catches growing companies out is what it measures: it's based on taxable turnover, not profit, so a busy, low-margin company can hit £90,000 long before it feels "big". Below the threshold you don't have to register, but you can choose to — voluntary registration lets you reclaim the VAT on what you buy, which suits some companies and not others. Once you're registered, you charge VAT on your sales and file VAT returns digitally. These rules are for the 2026/27 tax year and come from gov.uk.
Figures are for 2026/27 and sourced to gov.uk; thresholds change at Budgets. General guidance, not personal advice.
What is the VAT registration threshold in 2026/27?
The VAT registration threshold for 2026/27 is £90,000 of taxable turnover, and there are two separate tests that can trigger it (gov.uk).
The first is the backward-looking, rolling test: you check your taxable turnover over the last 12 months — not your accounting year, but any rolling 12-month window — and the moment it passes £90,000 you must register. Because it rolls, you re-check it every month; a single strong month can be the one that tips the previous twelve over the line. When that happens, you must register within 30 days of the end of the month in which you went over, and your registration takes effect from the first day of the second month after you crossed it.
The second is the forward-looking, 30-day test: if at any point you expect your taxable turnover to go over £90,000 in the next 30 days on its own — say you've just won a large contract — you must register straight away, and the effective date is the date you realised it would happen. This one is easy to miss because it doesn't wait for the money to land; the expectation alone triggers it.
Miss either deadline and HMRC can charge a penalty and still backdate your registration, so you'd owe the VAT you should have been charging. If you're trading near £90,000, the safest habit is to check the rolling figure at the end of every month.
This is the point we see misunderstood most often: VAT registration is triggered by taxable turnover, not profit. Taxable turnover is the total value of everything you sell that isn't VAT-exempt or outside the scope of VAT — your sales, before costs. Your margin, your overheads and what you actually take home don't come into it.
The practical consequence matters for the kind of company that goes limited. A consultant on high day rates and low costs, and a low-margin trade business buying in a lot of stock, can both cross £90,000 of turnover while keeping very different amounts of profit. The low-margin one often gets the bigger surprise, because the turnover stacks up fast even though the bottom line is modest. We see plenty of new directors assume VAT only bites once the business is comfortably profitable — it doesn't, and treating £90,000 as a profit figure is how companies end up registering late.
Not every penny of income counts. Genuinely VAT-exempt sales and income that's outside the scope of VAT sit outside the calculation, which is why the test is "taxable turnover" rather than simply "everything that came in". If a meaningful chunk of your income might be exempt, that's worth confirming before you assume you're under or over — the line isn't always obvious.
Should you register for VAT voluntarily before you have to?
You're allowed to register for VAT voluntarily even when your turnover is below £90,000, and for some companies it's a sensible move — for others it quietly costs them customers. It genuinely cuts both ways.
The case for registering early is reclaiming input VAT: once you're registered, you can recover the VAT on most of what the business buys — equipment, software, stock, professional fees. If you have significant VATable costs, or you mainly sell to other VAT-registered businesses who simply reclaim the VAT you charge them, voluntary registration can leave you better off and looks established to bigger clients.
The case against is the 20% you then have to add to your prices. If you sell to consumers or to small businesses that aren't VAT-registered, they can't reclaim that VAT, so registering effectively makes you 20% more expensive or squeezes your margin to absorb it. You also take on the admin: charging VAT correctly, keeping digital records and filing returns. The honest answer is that it depends almost entirely on who your customers are and how much VATable cost you carry — which is exactly the kind of thing worth modelling before you commit.
Registering changes how your company invoices, records and reports. From your effective registration date you must charge VAT on your taxable sales (standard rate 20% for most goods and services), show it on your invoices and pass it to HMRC — the VAT you collect isn't your money, it's collected on HMRC's behalf.
You then file VAT returns, usually quarterly, showing the VAT you've charged less the VAT you can reclaim on purchases, and pay the difference (or claim a refund). This all runs through Making Tax Digital for VAT: you keep digital records and submit returns using compatible software rather than typing figures into a portal. Getting your software set up properly from day one saves a lot of correction later.
There's also a route out. If your turnover later falls and stays below the deregistration threshold, you can apply to cancel your registration — we'll keep that qualitative here because the figure and the conditions are specific, and it's worth checking the current detail on gov.uk's VAT registration guidance rather than working from a half-remembered number.
This is the point where a good accountant earns their keep — choosing the right VAT scheme, getting the first return right and keeping the records HMRC expects. Go Limited doesn't file your VAT returns; we connect you with a partner accountant who handles the VAT setup and returns for you, so you're registered properly and on time. If you're still getting the company itself in order, start with our guide on how to set up a limited company, and weigh up the support you'll want in do you need an accountant for a limited company.
Where VAT fits with the rest of running a company
VAT is one of a handful of thresholds and deadlines every director picks up as the company grows — alongside your annual confirmation statement and, at the other end, the rules for closing a limited company if you ever wind it down. Knowing which one applies, and when, is most of staying on the right side of HMRC and Companies House. For the wider compliance picture and a partner to take it off your plate, see our accountancy page.
The thing to hold onto is the trigger itself: £90,000 of taxable turnover over any rolling 12 months, or expected in the next 30 days — measured on what you sell, not what you keep. Watch that figure monthly as you grow, and you'll never register late by accident.
What is the VAT threshold for 2026/27?
The VAT registration threshold is £90,000 of taxable turnover for the 2026/27 tax year. Once your taxable turnover passes £90,000 over any rolling 12-month period, your company must register for VAT. The figure is set by HMRC and can change at a Budget, so check the current threshold on gov.uk.
When do I have to register for VAT?
You must register within 30 days of the end of the month in which your rolling 12-month taxable turnover went over £90,000. You must also register immediately if you expect to exceed £90,000 in the next 30 days on its own — for example after winning a large contract. Registering late can mean a penalty and backdated VAT.
Is VAT registration based on turnover or profit?
Turnover, not profit. The £90,000 threshold measures your taxable turnover — the value of your sales that aren't exempt or outside the scope of VAT — before any costs. This is why a busy, low-margin company can cross the threshold while making relatively little profit, and why treating £90,000 as a profit figure leads directors to register late.
Can I register for VAT voluntarily?
Yes. You can register voluntarily even when your turnover is below £90,000. It lets you reclaim the VAT on your business purchases, which can suit companies with high VATable costs or those selling mainly to other VAT-registered businesses. The trade-off is adding 20% to your prices, which can deter customers who can't reclaim it — so it depends on who you sell to.
What happens after I register for VAT?
You charge VAT on your taxable sales, show it on your invoices, and file VAT returns — usually quarterly — under Making Tax Digital, keeping digital records and submitting through compatible software. You pay HMRC the VAT you've charged minus the VAT you can reclaim on purchases. A partner accountant can set up the right scheme and handle the returns.
A limited company must register for VAT once its taxable turnover goes over £90,000 in any rolling 12-month period — or as soon as it expects to exceed £90,000 in the next 30 days alone. When you cross the threshold on the rolling test, you must register within 30 days of the end of the month you went over. The figure that catches growing companies out is what it measures: it's based on taxable turnover, not profit, so a busy, low-margin company can hit £90,000 long before it feels "big". Below the threshold you don't have to register, but you can choose to — voluntary registration lets you reclaim the VAT on what you buy, which suits some companies and not others. Once you're registered, you charge VAT on your sales and file VAT returns digitally. These rules are for the 2026/27 tax year and come from gov.uk.
Figures are for 2026/27 and sourced to gov.uk; thresholds change at Budgets. General guidance, not personal advice.
What is the VAT registration threshold in 2026/27?
The VAT registration threshold for 2026/27 is £90,000 of taxable turnover, and there are two separate tests that can trigger it (gov.uk).
The first is the backward-looking, rolling test: you check your taxable turnover over the last 12 months — not your accounting year, but any rolling 12-month window — and the moment it passes £90,000 you must register. Because it rolls, you re-check it every month; a single strong month can be the one that tips the previous twelve over the line. When that happens, you must register within 30 days of the end of the month in which you went over, and your registration takes effect from the first day of the second month after you crossed it.
The second is the forward-looking, 30-day test: if at any point you expect your taxable turnover to go over £90,000 in the next 30 days on its own — say you've just won a large contract — you must register straight away, and the effective date is the date you realised it would happen. This one is easy to miss because it doesn't wait for the money to land; the expectation alone triggers it.
Miss either deadline and HMRC can charge a penalty and still backdate your registration, so you'd owe the VAT you should have been charging. If you're trading near £90,000, the safest habit is to check the rolling figure at the end of every month.
This is the point we see misunderstood most often: VAT registration is triggered by taxable turnover, not profit. Taxable turnover is the total value of everything you sell that isn't VAT-exempt or outside the scope of VAT — your sales, before costs. Your margin, your overheads and what you actually take home don't come into it.
The practical consequence matters for the kind of company that goes limited. A consultant on high day rates and low costs, and a low-margin trade business buying in a lot of stock, can both cross £90,000 of turnover while keeping very different amounts of profit. The low-margin one often gets the bigger surprise, because the turnover stacks up fast even though the bottom line is modest. We see plenty of new directors assume VAT only bites once the business is comfortably profitable — it doesn't, and treating £90,000 as a profit figure is how companies end up registering late.
Not every penny of income counts. Genuinely VAT-exempt sales and income that's outside the scope of VAT sit outside the calculation, which is why the test is "taxable turnover" rather than simply "everything that came in". If a meaningful chunk of your income might be exempt, that's worth confirming before you assume you're under or over — the line isn't always obvious.
Should you register for VAT voluntarily before you have to?
You're allowed to register for VAT voluntarily even when your turnover is below £90,000, and for some companies it's a sensible move — for others it quietly costs them customers. It genuinely cuts both ways.
The case for registering early is reclaiming input VAT: once you're registered, you can recover the VAT on most of what the business buys — equipment, software, stock, professional fees. If you have significant VATable costs, or you mainly sell to other VAT-registered businesses who simply reclaim the VAT you charge them, voluntary registration can leave you better off and looks established to bigger clients.
The case against is the 20% you then have to add to your prices. If you sell to consumers or to small businesses that aren't VAT-registered, they can't reclaim that VAT, so registering effectively makes you 20% more expensive or squeezes your margin to absorb it. You also take on the admin: charging VAT correctly, keeping digital records and filing returns. The honest answer is that it depends almost entirely on who your customers are and how much VATable cost you carry — which is exactly the kind of thing worth modelling before you commit.
Registering changes how your company invoices, records and reports. From your effective registration date you must charge VAT on your taxable sales (standard rate 20% for most goods and services), show it on your invoices and pass it to HMRC — the VAT you collect isn't your money, it's collected on HMRC's behalf.
You then file VAT returns, usually quarterly, showing the VAT you've charged less the VAT you can reclaim on purchases, and pay the difference (or claim a refund). This all runs through Making Tax Digital for VAT: you keep digital records and submit returns using compatible software rather than typing figures into a portal. Getting your software set up properly from day one saves a lot of correction later.
There's also a route out. If your turnover later falls and stays below the deregistration threshold, you can apply to cancel your registration — we'll keep that qualitative here because the figure and the conditions are specific, and it's worth checking the current detail on gov.uk's VAT registration guidance rather than working from a half-remembered number.
This is the point where a good accountant earns their keep — choosing the right VAT scheme, getting the first return right and keeping the records HMRC expects. Go Limited doesn't file your VAT returns; we connect you with a partner accountant who handles the VAT setup and returns for you, so you're registered properly and on time. If you're still getting the company itself in order, start with our guide on how to set up a limited company, and weigh up the support you'll want in do you need an accountant for a limited company.
Where VAT fits with the rest of running a company
VAT is one of a handful of thresholds and deadlines every director picks up as the company grows — alongside your annual confirmation statement and, at the other end, the rules for closing a limited company if you ever wind it down. Knowing which one applies, and when, is most of staying on the right side of HMRC and Companies House. For the wider compliance picture and a partner to take it off your plate, see our accountancy page.
The thing to hold onto is the trigger itself: £90,000 of taxable turnover over any rolling 12 months, or expected in the next 30 days — measured on what you sell, not what you keep. Watch that figure monthly as you grow, and you'll never register late by accident.
What is the VAT threshold for 2026/27?
The VAT registration threshold is £90,000 of taxable turnover for the 2026/27 tax year. Once your taxable turnover passes £90,000 over any rolling 12-month period, your company must register for VAT. The figure is set by HMRC and can change at a Budget, so check the current threshold on gov.uk.
When do I have to register for VAT?
You must register within 30 days of the end of the month in which your rolling 12-month taxable turnover went over £90,000. You must also register immediately if you expect to exceed £90,000 in the next 30 days on its own — for example after winning a large contract. Registering late can mean a penalty and backdated VAT.
Is VAT registration based on turnover or profit?
Turnover, not profit. The £90,000 threshold measures your taxable turnover — the value of your sales that aren't exempt or outside the scope of VAT — before any costs. This is why a busy, low-margin company can cross the threshold while making relatively little profit, and why treating £90,000 as a profit figure leads directors to register late.
Can I register for VAT voluntarily?
Yes. You can register voluntarily even when your turnover is below £90,000. It lets you reclaim the VAT on your business purchases, which can suit companies with high VATable costs or those selling mainly to other VAT-registered businesses. The trade-off is adding 20% to your prices, which can deter customers who can't reclaim it — so it depends on who you sell to.
What happens after I register for VAT?
You charge VAT on your taxable sales, show it on your invoices, and file VAT returns — usually quarterly — under Making Tax Digital, keeping digital records and submitting through compatible software. You pay HMRC the VAT you've charged minus the VAT you can reclaim on purchases. A partner accountant can set up the right scheme and handle the returns.
