If your TikTok Shop has been growing fast, VAT registration isn't a one-off event you schedule — it's a line you can cross without noticing, on any day of the year, the moment your rolling 12-month taxable turnover tips past £90,000.
Most first-time sellers assume VAT is an end-of-tax-year problem. It isn't. The test runs continuously, and if you miss the date you should have registered, HMRC can backdate your registration and bill you for VAT you never charged your customers. This walkthrough takes you through both registration tests, the steps, how your effective date is set, what your first return looks like, and — crucially for TikTok sellers — how the overseas and deemed-supplier rules change what actually counts toward the £90k.
The two tests: rolling 12 months and the 30-day forward look
There are two separate triggers for compulsory VAT registration in 2026/27. You only need to breach one of them.
1. The rolling 12-month (backward-looking) test
At the end of every month, you add up your taxable turnover for the previous 12 months. Not your tax year — a rolling window. If that total exceeds £90,000, you must register. This threshold has been frozen since 1 April 2024.
The key word is rolling. On 30 June you look back to 1 July the year before. On 31 July you look back to 1 August. The window slides forward one month at a time, so a strong run of sales can push you over even if your calendar-year total looks modest.
2. The 30-day forward-look test
You must also register if, at any single point, you expect your taxable turnover in the next 30 days alone to exceed £90,000. This catches sudden spikes — a viral product, a Black Friday push, a big TikTok LIVE drop. If you know a single 30-day stretch will breach the threshold, you register based on that expectation, immediately, without waiting for the sales to actually land.
What actually counts as "taxable turnover" for a TikTok seller
This is where TikTok sellers trip up, because not all your income counts. Taxable turnover means sales that would be subject to UK VAT (standard, reduced or zero-rated) — it excludes anything that is outside the scope of UK VAT.
- Goods you sell to UK customers through your TikTok Shop: counts in full.
- Affiliate / marketing commission from a UK-established business: counts, and it's standard-rated at 20% once you're registered.
- Affiliate / marketing commission billed to an overseas business (a Chinese or US seller, or an overseas TikTok entity): this is a B2B service, and under the general place-of-supply rule a service is supplied where the customer belongs. A business customer overseas means the supply is outside the scope of UK VAT — so it does not count toward your £90,000.
That distinction is huge. We cover it in depth in our guide to tax on TikTok affiliate commission in the UK, but the short version is: keep your UK and overseas commission clearly separated in your bookkeeping, because only one of them moves you toward the threshold. For a fuller picture of how the £90k line interacts with different TikTok income streams, see our TikTok Shop VAT threshold guide.
How the deemed-supplier and overseas rules interact with your turnover
TikTok Shop operates as an online marketplace (OMP), and for certain sales it becomes the deemed supplier — meaning TikTok, not you, accounts for the UK VAT. This applies to two main cases:
- Goods sold by overseas sellers that are already in the UK at the point of sale.
- Low-value imported consignments of £135 or less sold to UK customers.
In those scenarios TikTok charges and remits the 20% VAT itself. If you are a UK-established seller selling your own UK-located stock to UK customers, the deemed-supplier rules generally do not apply to you — you are the supplier, the sale is your taxable turnover, and it counts toward your threshold. If you're unsure which side of this line you sit on, our explainers on the TikTok Shop deemed-supplier VAT rules and overseas sellers and UK VAT walk through it case by case.
The practical takeaway: when you tally your rolling 12-month figure, include your own UK sales and UK-business commission, and exclude overseas commission that's outside the scope. Don't accidentally count VAT that TikTok has already accounted for as deemed supplier on someone else's behalf.
Worked example: Priya crosses the threshold mid-year
Priya runs a UK-based TikTok Shop selling skincare from stock she holds in Manchester. She also earns affiliate commission. Here's her rolling 12-month picture to the end of each month:
- UK product sales running at roughly £6,500–£9,000 a month and climbing through spring.
- UK-business affiliate commission of about £800/month — this counts.
- Commission from an overseas brand (a US seller) of about £1,200/month — outside the scope, this does not count.
By the end of August 2026, Priya adds up the previous 12 months of taxable turnover (UK sales + UK commission, ignoring the US commission entirely) and gets £88,400 — under the line, no action needed yet.
In September 2026 a product goes viral. Her UK sales that month hit £11,200. At the end of September her rolling 12-month taxable turnover is now £96,000 — over £90,000. She has breached the backward-looking test.
What happens next, by the dates:
- She breached at the end of September 2026 (the month the rolling total crossed £90k).
- She must notify HMRC within 30 days of the end of that month — so by 30 October 2026.
- Her effective date of registration is the first day of the second month after she went over — i.e. 1 November 2026.
From 1 November 2026, Priya must charge 20% VAT on her standard-rated UK sales and on her UK-business commission. Her US commission stays outside the scope. Note how the rules connect: if that overseas commission had counted, she'd have crossed months earlier — which is exactly why getting the place-of-supply treatment right matters.
Had Priya instead foreseen the viral spike — say she'd lined up a campaign she knew would do £90k+ in 30 days — she'd have used the forward-look test, and her effective date would be the date she formed that expectation, not the start of a later month.
The registration steps
Registration is done online through your Government Gateway account. In practice:
- Gather your details: business start date, your turnover figures, business bank details, and your Self Assessment / UTR or company details. (If you haven't yet registered for Self Assessment, you must do so once your gross trading income passes the £1,000 trading allowance in a tax year — that's separate from VAT.)
- Apply via gov.uk "Register for VAT". HMRC will ask which test you've breached and your expected turnover.
- Receive your VAT number and certificate, usually within a few weeks. Until it arrives you can't show VAT separately on invoices — but you're still liable for VAT from your effective date, so build it into your prices and reconcile once the number lands.
- You'll be enrolled for Making Tax Digital for VAT automatically — VAT returns must be filed through MTD-compatible software. Don't confuse this with MTD for Income Tax, which is a separate regime starting 6 April 2026 for sole traders and landlords with qualifying income over £50,000.
Your first VAT return
Once registered, you'll usually file quarterly. Each return reports the VAT you charged on sales (output tax) and the VAT you reclaim on business costs (input tax); you pay the difference, or claim a refund if your input tax is higher.
For TikTok sellers the reclaim side is real money. The platform's fees and commission carry VAT you can recover once registered — we cover the mechanics in reclaiming VAT on TikTok Shop fees and commission. You can also reclaim VAT on stock and certain pre-registration costs (goods bought in the four years before registration and still on hand; services in the prior six months). For the practical return-filing workflow specific to the platform, see our guide to completing a TikTok Shop VAT return.
Watch the timing trap: your settlement reports show gross sales, refunds, returns reserves and fees all netted together. Pull these apart before you file — your VAT is due on the actual taxable sales, not on the net payout TikTok deposits.
One more thing: HMRC already has your numbers
Since 1 January 2024, under the OECD digital-platform reporting rules (often called DAC7), TikTok Shop must report your income and identity details to HMRC each year. The first reports, covering 2024, were due by 31 January 2025, and your 2025 figures were reported by 31 January 2026. HMRC cross-checks these against what you declare. If your rolling turnover obviously crossed £90k and you didn't register, that gap is now visible. Get the registration date right the first time.
Sources
- Register for VAT — GOV.UK
- When to register for VAT (thresholds and tests) — GOV.UK
- VAT Notice 741A: place of supply of services — GOV.UK
- VAT and overseas goods sold via online marketplaces — GOV.UK
- Selling on digital platforms: what HMRC is told — GOV.UK
Frequently asked questions
Does affiliate commission from overseas brands count toward the £90,000 VAT threshold?
No. Affiliate or marketing commission billed to an overseas business is a B2B service supplied where the customer belongs. Because the customer is overseas, the supply is outside the scope of UK VAT, so it doesn't count toward your £90,000 rolling taxable turnover. Commission from a UK-established business does count and is standard-rated at 20% once you're registered.
When exactly does my VAT registration take effect if I cross the threshold mid-year?
Under the rolling 12-month test, you must notify HMRC within 30 days of the end of the month in which your taxable turnover exceeded £90,000. Your effective date of registration is then the first day of the second month after you went over. For example, breach the threshold at the end of September and your effective date is 1 November — you must charge VAT from that date.
Do I have to register if a single viral month pushes me over?
If your rolling 12-month total crosses £90,000, yes — even if it was driven by one strong month. Separately, if you ever expect your taxable turnover in the next 30 days alone to exceed £90,000, you must register based on that expectation immediately under the forward-look test, with your effective date being the date you formed that expectation.
If TikTok accounts for VAT as the deemed supplier, do those sales count toward my threshold?
The deemed-supplier rules apply mainly to overseas-seller goods already in the UK and to low-value imported consignments of £135 or less, where TikTok charges and remits the VAT. If you're a UK-established seller selling your own UK-located stock to UK customers, those rules generally don't apply — you are the supplier, and those sales are your taxable turnover and count toward your £90,000 threshold.
