UK VAT Registration Guide 2026
Value Added Tax (VAT) is a consumption tax charged on most goods and services. If your business turnover exceeds the threshold, you must register for VAT and charge it to customers.
VAT Thresholds 2026/27
| Threshold | Amount |
|---|---|
| Registration (mandatory) | £90,000 |
| Deregistration | £88,000 |
| Distance selling | £70,000 |
When Must You Register?
You must register for VAT if:
1. Historical Threshold
Your taxable turnover in the last 12 months exceeded £90,000.
2. Future Threshold
You expect taxable turnover to exceed £90,000 in the next 30 days alone.
3. Taking Over a VAT Business
You take over a VAT-registered business.
How to Register
Online Registration (Most Common)
- Go to gov.uk/register-for-vat
- Sign in with Government Gateway
- Provide business details:
- Trading name
- Business address
- Bank account details
- Expected turnover
- Submit application
- Receive VAT registration certificate (usually within 30 days)
What You'll Receive
- VAT registration number
- Effective date of registration
- VAT return periods (usually quarterly)
- First VAT return deadline
Voluntary Registration
You can register voluntarily even below the £90,000 threshold.
Advantages
- Reclaim VAT on purchases: Get back VAT on business expenses
- Appear more established: Some clients prefer VAT-registered suppliers
- Avoid backdating: Register before forced to
Disadvantages
- Admin burden: Quarterly returns, MTD compliance
- Cash flow: May need to charge VAT before customers pay you
- Price increase: Your prices may need to rise by 20%
VAT Schemes
Standard VAT
- Charge 20% on sales
- Reclaim VAT on purchases
- Submit quarterly returns
- Calculate actual VAT due
Flat Rate Scheme
- Pay a fixed percentage of turnover to HMRC
- Cannot reclaim VAT on most purchases
- Simpler administration
- May be cheaper if few purchases
Cash Accounting
- Account for VAT when money received/paid
- Better for cash flow
- Available if turnover under £1.35 million
Annual Accounting
- Submit one annual return
- Make interim payments throughout year
- Reduces admin
VAT Rates
| Rate | Percentage | Applies To |
|---|---|---|
| Standard | 20% | Most goods and services |
| Reduced | 5% | Home energy, children's car seats |
| Zero | 0% | Food, children's clothing, books |
| Exempt | N/A | Insurance, education, health |
Making Tax Digital for VAT
All VAT-registered businesses must comply with MTD:
- Keep digital records
- Use MTD-compatible software
- Submit returns digitally
Frequently Asked Questions
What counts towards the VAT threshold?
Taxable turnover includes:
- Standard-rated sales (20%)
- Reduced-rated sales (5%)
- Zero-rated sales (0%)
It excludes exempt supplies and sales outside the UK.
Can I backdate my VAT registration?
Yes, up to 4 years. You can reclaim VAT on goods still held and services received in the 6 months before registration.
What if I go over the threshold temporarily?
You must still register. You can deregister later if turnover drops below £88,000.
How quickly must I register?
Within 30 days of the end of the month when you went over threshold.
Related Calculators
- VAT Calculator - Add or remove VAT
- Flat Rate VAT Calculator - Compare schemes