# When do I need to register for VAT?

Pick My Accountant (https://pickmyaccountant.co.uk/answers/when-do-i-need-to-register-for-vat/): When do I need to register for VAT? — Quick answer. You must register for VAT once your taxable turnover exceeds £90,000 in any rolling 12-month period — not your accounting year — or if you expect to pass it in the next 30 days alone. You have 30 days from the end of the month you crossed the threshold to register, and you can register voluntarily below it.

## Key facts

- Registration threshold: £90,000 taxable turnover in any rolling 12 months (since April 2024)
- It's a rolling test — check the last 12 months at each month end, not your financial year
- Deadline: register within 30 days of the end of the month you crossed the threshold
- Deregistration threshold: £88,000
- Late registration means paying the VAT you should have charged, plus possible penalties

## The rolling 12-month trap

The most common VAT mistake is checking turnover by accounting year. The law asks: at the end of each calendar month, did taxable sales in the previous 12 months exceed £90,000? A strong nine months can tip you over mid-year. There's also the forward test — if a single contract means you'll pass £90,000 in the next 30 days alone, registration is immediate.

## Should you register voluntarily?

Registering below the threshold lets you reclaim VAT on purchases and can make you look more established to business customers. It makes sense when your customers are VAT-registered businesses (they reclaim what you charge) or you have significant VAT-bearing costs. It hurts when you sell to consumers, who simply see a 20% price rise or you absorb the margin.

## What registration brings with it

Quarterly digital VAT returns under Making Tax Digital, choosing a scheme (standard, flat rate, cash accounting, annual accounting), VAT invoices, and record-keeping. This is the point where many businesses first hire an accountant — VAT return add-ons typically run £20–£45/month on our benchmarks, and scheme choice alone can be worth more than that.

## FAQs

**Q: What counts as taxable turnover?**
A: All sales that would be standard, reduced, or zero-rated for VAT — including zero-rated ones. Exempt income (some financial services, most residential rent) and income outside the scope of VAT don't count.

**Q: What is the flat rate scheme?**
A: A simplification for businesses with turnover up to £150,000: you pay HMRC a fixed percentage of gross turnover instead of tracking VAT on every purchase. Good for low-cost service businesses; the 'limited cost trader' 16.5% rate removes most of the benefit if you buy few goods.

**Q: Can I deregister if turnover falls?**
A: Yes, if you expect taxable turnover to stay under £88,000 in the next 12 months you can apply to deregister — worth reviewing if you've scaled back.

Updated: 2026-07-08

Source: https://pickmyaccountant.co.uk/answers/when-do-i-need-to-register-for-vat/