What is the VAT registration threshold and when must I register?

The VAT registration threshold for the 2024/25 tax year is £90,000. This threshold was increased from £85,000 to £90,000 on 1 April 2024.

When you must register for VAT:

You must register for VAT if:

• Your VAT taxable turnover exceeded £90,000 in the last 12 months (on a rolling basis, not just the tax year). This is the "backward look" test.
• You expect your VAT taxable turnover to exceed £90,000 in the next 30 days alone. This is the "forward look" test.

You must register within 30 days of the end of the month in which you exceeded the threshold.

Voluntary registration:

You can register for VAT voluntarily even if your turnover is below £90,000. This can be beneficial because:

• You can reclaim VAT on your business purchases and expenses.
• It can make your business appear more established to other businesses.
• If most of your customers are VAT-registered businesses, they can reclaim the VAT you charge.

However, voluntary registration means you must charge VAT on your sales, which could make your prices higher for non-VAT-registered customers.

VAT deregistration:

You can deregister if your taxable turnover falls below the deregistration threshold of £88,000.

How to register:

• Register online through your Government Gateway account on GOV.UK.
• You will receive a VAT registration certificate with your VAT number, usually within 30 working days.
• Once registered, you must submit VAT returns (usually quarterly) and keep proper VAT records.