If your turnover is creeping towards £90,000, or you've already gone over, you need to act fast. VAT registration has a tight deadline, and missing it can mean a penalty plus a bill for VAT you never charged your customers.
The good news is that the process itself is straightforward once you know the order to do things in. This guide walks you through who has to register, the timing rules that trip people up, exactly how to register online, and what changes the day your VAT number lands.
It's written for sole traders, limited companies, and ecommerce sellers in England, Wales and Northern Ireland. If you're already trading and unsure where you stand, start with the threshold check below.
Do I have to register for VAT?
You must register for VAT if either of these is true:
- Your total VAT taxable turnover for the last 12 months goes over £90,000 (the registration threshold for the period from 1 April 2024), or
- You expect your taxable turnover to go over £90,000 in the next 30 days alone.
"Taxable turnover" means the total value of everything you sell that isn't VAT-exempt. That includes sales at the standard rate, the reduced rate, and the zero rate. It's based on turnover, not profit, so your costs don't come into it.
There's also a separate rule that catches businesses based outside the UK: if your business is established overseas and you supply any goods or services to the UK, you generally have to register regardless of turnover. There's no threshold for non-established businesses.
What is the VAT registration threshold?
The threshold has been £90,000 since 1 April 2024. Here are the figures you'll actually use.
| Figure | Amount | Applies from |
|---|---|---|
| VAT registration threshold | £90,000 | 1 April 2024 |
| VAT deregistration threshold | £88,000 | 1 April 2024 |
| Standard VAT rate | 20% | current |
| Reduced VAT rate | 5% | current |
| Zero VAT rate | 0% | current |
The registration threshold is a rolling 12-month figure, not your accounting year or the tax year. Each month you check the previous 12 months as a running total. The deregistration threshold of £88,000 matters later: if your taxable turnover falls below it, you can ask to cancel your registration.
When exactly do I have to register?
This is where most people slip up, because there are two separate tests with two different deadlines and two different start dates for charging VAT.
The backward look (the rolling 12-month test)
If your taxable turnover over the last 12 months goes over £90,000, you have to register within 30 days of the end of the month when you went over the threshold.
Your effective date of registration is the first day of the second month after you go over the threshold. That's the date you must start charging VAT from.
Illustrative example: Tom, a sole-trader plumber
Tom checks his rolling 12-month turnover at the end of each month. At the end of August it hits £92,000, so he has crossed the £90,000 threshold during August.
- He must register by 30 September (within 30 days of the end of August).
- His effective date of registration is 1 October (the first day of the second month after he went over).
- From 1 October, Tom has to charge 20% VAT on his standard-rated work.
If Tom misses the 30 September deadline, HMRC can still backdate his effective date to 1 October. He'd then owe VAT on sales made since then even if he never added VAT to those invoices, so the VAT comes out of his own pocket. That's why the deadline matters.
The forward look (the 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, you have to register by the end of that 30-day period.
Here the effective date of registration is the date you realised, not the date your turnover actually tipped over. So if you win a single large contract on 10 March that you know will push you over £90,000 within 30 days, your effective date is 10 March and you charge VAT from then.
Should I register voluntarily?
You can choose to register for VAT even if your turnover is below £90,000. Whether it's worth it depends on who your customers are and what you buy.
Voluntary registration tends to help when:
- Most of your customers are VAT-registered businesses who can reclaim the VAT you charge, so your prices effectively don't rise for them.
- You buy a lot of standard-rated goods or services and want to reclaim the VAT on them.
- You sell zero-rated goods (you charge 0% but can still reclaim VAT on your costs, which can mean regular refunds).
It tends to hurt when most of your customers are members of the public or other non-registered businesses, because adding 20% either makes you look more expensive or eats into your margin.
If you're an online seller weighing this up, our guidance for ecommerce businesses covers how marketplace fees and overseas sales feed into the decision. It's worth a short conversation before you commit, because deregistering later isn't always simple.
How do I register for VAT step by step?
Most businesses register online. Here's the order to work through it.
- Confirm you actually need to register. Run both the backward look and the forward look above so you pick the right effective date.
- Get a Government Gateway user ID. You sign in to register for VAT, and if you don't already have sign-in details you can create them the first time you sign in. A limited company will usually use its business tax account.
- Gather your information. See the checklist in the next section so you can complete the application in one sitting.
- Complete the online VAT application. You'll confirm your business details, your turnover, your main business activity, and the date you became liable to register.
- Submit and wait for your VAT number. HMRC sends a 9-digit VAT registration number, which you must include on all your invoices, plus confirmation of your effective date of registration.
- Set up MTD-compatible software before your first return. HMRC signs your business up to Making Tax Digital for VAT automatically unless you're exempt or have applied for an exemption.
If you'd rather not deal with HMRC directly, you can appoint an accountant or agent to register and submit your VAT Returns on your behalf. You still keep access to your own VAT online account.
What information do I need to register?
Have these to hand before you start. The exact list depends on whether you're a sole trader, a partnership, or a limited company.
| Information needed | Sole trader / partnership | Limited company |
|---|---|---|
| Government Gateway sign-in | Yes | Yes (business tax account) |
| National Insurance number | Yes | Not applicable |
| Identity document (passport or driving licence) | Yes | Not applicable |
| Company registration number | Not applicable | Yes |
| Unique Taxpayer Reference (UTR) | If you have one | Yes |
| Business bank account details | Yes | Yes |
| Annual turnover figures | Yes | Yes |
| Estimate of taxable turnover for the next 12 months | Yes | Yes |
| Main business activity | Yes | Yes |
If you run a limited company, make sure your company registration number and UTR match exactly what's held at Companies House and HMRC, or the application can stall. Sole traders should double-check that the name on the identity document matches their HMRC record.
What happens after I register for VAT?
Once you're registered, four things change from your effective date of registration.
1. You charge VAT on your sales. You add VAT at the correct rate to everything taxable you sell, usually 20%, and your invoices must show your VAT number and the VAT charged. You owe HMRC the VAT from your effective date even if your number arrives a few weeks later, so in practice many businesses raise invoices without VAT in the gap and reissue or invoice the VAT separately once the number lands.
2. You keep digital VAT records. Under Making Tax Digital for VAT you must keep your records digitally and file using MTD-compatible software. Good bookkeeping from day one makes every return painless rather than a quarterly scramble.
3. You submit VAT Returns. Most businesses file a return every quarter, showing the VAT you've charged (output tax) and the VAT you've paid on purchases (input tax). You pay HMRC the difference, or claim a refund if you've paid more than you've charged.
4. You pay any VAT due. Payment is normally due one calendar month and seven days after the end of each VAT period.
It's worth modelling the cash-flow impact before your first quarter so the bill doesn't surprise you. Our tax advisory team often helps newly registered businesses pick the right VAT scheme, such as the Flat Rate or Cash Accounting scheme, which can change how much you pay and when.
Can I reclaim VAT I paid before registering?
Often, yes. You can reclaim VAT on some purchases made before your effective date of registration, within set time limits, as long as they relate to your taxable business.
- Goods: you can reclaim VAT on goods bought up to 4 years before registration, provided you still have those goods (or goods made from them) and they'll be used in the VAT-registered business.
- Services: you can reclaim VAT on services bought up to 6 months before registration.
In both cases the purchases must have been for the business and you'll need the VAT invoices to support the claim. You include this pre-registration VAT on your first VAT Return. This is one of the most-missed reliefs we see, and for businesses that bought equipment or stock before registering it can be worth a meaningful refund.
Frequently asked questions
What is the VAT registration threshold for 2025/26?
The VAT registration threshold is £90,000 of taxable turnover, measured over a rolling 12-month period. It has applied since 1 April 2024. You must also register if you expect to go over £90,000 in the next 30 days on its own.
How long does it take to get a VAT number?
HMRC issues a 9-digit VAT registration number once your application is processed, along with confirmation of your effective date of registration. Timescales vary, so register as soon as you're liable rather than waiting until the deadline.
What is the effective date of registration?
It's the date from which you must start charging VAT and accounting for it to HMRC. Under the backward look it's the first day of the second month after you went over the threshold. Under the forward look it's the date you realised you'd exceed £90,000 within 30 days.
Do I have to charge VAT before my VAT number arrives?
You're liable for VAT from your effective date of registration even if your number hasn't arrived yet. You can't show a VAT number you don't have, so most businesses adjust their prices to cover the VAT and then reissue invoices or invoice the VAT once the number comes through.
Can I deregister if my turnover drops?
Yes. If your taxable turnover falls below the £88,000 deregistration threshold, you can ask HMRC to cancel your VAT registration. Whether that's the right move depends on your customers and costs, so it's worth checking first.
Do I need accounting software to register for VAT?
You don't need software to apply, but you do need MTD-compatible software to keep records and file returns afterwards, because HMRC signs new registrations up to Making Tax Digital for VAT unless you're exempt.
Ready to register without the guesswork?
Getting your effective date and first return right saves money and stress. If you'd like a hand, book a free 20-minute call with a Zmartly accountant and we'll confirm whether you need to register, handle the application, and set up your VAT returns so your first quarter is clean.
