The VAT threshold in the UK determines when a business must register for VAT.
If your turnover exceeds this threshold, you are legally required to register and start charging VAT on your sales.
This guide explains the current VAT threshold, how it works, and what it means for your business.
The VAT threshold in the UK is £90,000 in a rolling 12-month period.
If your taxable turnover exceeds this amount, you must register for VAT.
The threshold is based on your total taxable turnover over any 12 months, not just a calendar year.
You must monitor your turnover regularly to determine if you need to register.
Example:
If your turnover reaches £90,000 between April and March, you must register for VAT even if your yearly income varies.
What is the VAT threshold in the UK?
The VAT threshold is the amount of taxable turnover a business can generate before it must register for VAT.
As of 2026, the VAT threshold in the UK is £90,000 over a rolling 12-month period.
If your turnover exceeds this amount, you must register for VAT with HMRC.
What Counts Towards the VAT Threshold?
The VAT threshold is based on your taxable turnover.
This includes:
- Sales of goods and services subject to VAT
- Standard-rated, reduced-rated, and zero-rated items
It does not include:
- VAT-exempt income
- Certain one-off transactions
Understanding what counts is important to avoid registering too early or too late.
When Do You Need to Register for VAT?
You must register for VAT if your taxable turnover exceeds £90,000 in any rolling 12-month period.
This is not based on the tax year but on any 12-month window.
You must also register if you expect your turnover to exceed the threshold in the next 30 days.
Can You Register for VAT Voluntarily?
Yes, you can register for VAT voluntarily even if your turnover is below the threshold.
Some businesses choose to do this to:
- Reclaim VAT on expenses
- Improve credibility with larger clients
However, you will also need to charge VAT on your sales.
If you exceed the VAT threshold, you must register for VAT.
See our VAT Registration UK guide for step-by-step instructions.
How VAT Registration Affects Your Pricing
Once you are VAT registered, you must add VAT to your prices.
For example:
£100 × 1.20 = £120 (including VAT)
If your prices already include VAT, you will need to account for this when calculating profit.
Use a VAT Calculator to check your figures.
You can also learn how to calculate VAT or remove VAT using our step-by-step guides.
VAT Threshold FAQs
What is the current VAT threshold in the UK?
The VAT threshold is £90,000 in a rolling 12-month period.
Do I need to register as soon as I hit £90,000?
Yes, you must register once your turnover exceeds the threshold or if you expect to exceed it soon.
Can I avoid registering for VAT?
You must register if you exceed the threshold, but you can manage your turnover to stay below it if appropriate.
You may also find these helpful:
VAT Calculator UK
VAT Registration UK
Do You Need to Charge VAT
These guides help you understand when VAT applies to your business.
Disclaimer
This guide is for general information only. While every effort is made to ensure accuracy, we are an independent resource and not affiliated with HMRC. Always consult a qualified professional for financial decisions.