You must register if:
- your total VAT taxable turnover for the last 12 months was over £90,000 (the VAT threshold)
- you expect your turnover to go over £90,000 in the next 30 days
You must also register (regardless of VAT taxable turnover) if all of the following are true:
- you’re based outside the UK
- your business is based outside the UK
- you supply any goods or services to the UK (or expect to in the next 30 days)
You can choose to register for VAT if your turnover is less than £90,000 (‘voluntary registration’).
You must pay HM Revenue and Customs (HMRC) any VAT you owe from the date they register you.
If everything you sell is exempt from VAT, you do not have to register for VAT.
If you exceed the threshold in the last 12 months
You must register if, by the end of any month, your total VAT taxable turnover for the last 12 months was 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.
Example
Between 10 July 2019 and 9 July 2020 your VAT taxable turnover is £100,000. That’s the first time it has gone over the VAT threshold. You must register by 30 August 2020. Your effective date of registration is 1 September 2020.
If you're going to exceed the threshold in the next 30 days
You must register if you realise that your annual total VAT taxable turnover is going to go over the £90,000 threshold in the next 30 days.
You have to register by the end of that 30-day period. Your effective date of registration is the date you realised, not the date your turnover went over the threshold.
Example
On 1 May, you arrange a £100,000 contract to provide services. You’ll be paid at the end of May. You must register by 30 May. Your effective date of registration will be 1 May.
“If you take over a VAT-registered business, you must register for VAT if the combined taxable turnover of the new business and your existing business is over the threshold.”
Calculate your turnover
Your turnover is the total value of everything you sell that is not exempt from VAT. It also includes:
- zero-rated goods
- goods you hired or loaned to customers
- business goods used for personal reasons
- goods you bartered, part-exchanged or gave as gifts
- services you received from businesses in other countries that you had to ‘reverse charge’
- building work over £100,000 your business did for itself
Late registration
If you register late, you must pay VAT on any sales you’ve made since the date you should have registered.
You might need to pay a penalty, depending on how much you owe and how late your registration is.