UK VAT — Registration rules
Deregistration threshold
£88,000
When turnover falls below this you may deregister
30-day forward rule
Same threshold
Expecting to cross in the next 30 days alone → register now
You must register for UK VAT once your VAT-taxable turnover crosses £90,000 in any rolling 12-month period — or when you reasonably expect to cross it in the next 30 days alone. Below the threshold, registration is voluntary. This page walks through the rule plus four common scenarios.
At the end of every month, look back over the previous 12 months. If your VAT-taxable turnover during that 12-month window has crossed £90,000, you have 30 days from the end of the month to notify HMRC. Your effective registration date is the first day of the second month after the month you crossed. If you reasonably expect your turnover to exceed the threshold in the next 30 days alone (e.g. a single large contract), you must register from that date, not from the end of the month.
Source: HMRC — When to register for VAT · Last reviewed 2026-05-12
Setup: You've billed roughly £6,000/month for 18 months. No single month above £8,500.
What to do: You're under the £90,000 rolling 12-month threshold. Registration is voluntary, not mandatory. Consider it only if you mostly serve VAT-registered B2B customers (so charging VAT doesn't lose you sales) and you have significant VAT-able costs to reclaim.
Setup: You're at £85,000 of taxable turnover with one month left in your rolling 12-month window. Year-end is approaching.
What to do: If you expect to cross £90,000 in the NEXT 30 days alone, you must register within 30 days of the day you realised. Otherwise, watch the rolling window — register the moment cumulative 12-month turnover crosses £90,000. Penalties for late registration scale with how late you are.
Setup: You're at £80,000 for the year. A single £20,000 invoice lands.
What to do: You're now at £100,000 over the rolling 12 months. Mandatory registration — you have 30 days from the end of the month in which you crossed to notify HMRC. Effective registration date is the first of the second month after you crossed.
Setup: You registered at £95k two years ago. Trade has slowed and you're now at £82,000 annual taxable turnover.
What to do: You can apply to deregister once your taxable turnover drops below the deregistration threshold (£88,000). You don't have to — many freelancers stay registered to keep client trust and to keep reclaiming input VAT. If you deregister, you may have to account for VAT on stock and assets on hand.
| Counts | Doesn't count |
|---|---|
| Standard-rated sales (20%) | Exempt sales (insurance, finance, education) |
| Reduced-rated sales (5%) | Outside-scope sales (services to overseas B2B per place-of-supply rules) |
| Zero-rated sales (0%) | Sale of capital assets used in the business |
| Reverse-charge supplies received | Government grants you receive |
Source: HMRC — When to register for VAT · Last reviewed 2026-05-12
You can register voluntarily at any taxable-turnover level. Helps if:
Voluntary registration is usually a bad idea if you sell to consumers — they effectively see your prices rise by 20% and you have to swallow it or lose the work.
£90,000 of VAT-taxable turnover in any rolling 12-month period. The 12-month window is checked at the end of every month, not at year-end. Source HMRC; reviewed 2026-05-12.
You must register immediately if you reasonably expect your taxable turnover to exceed £90,000 in the NEXT 30 days alone (e.g. a single large contract). Notification is required within 30 days of realising; effective registration date is the day you realised.
Sales of standard, reduced and zero-rated goods or services. Exempt supplies (insurance, education, finance) do NOT count. Sales outside the scope of UK VAT (some exports) usually don't count either.
Yes — voluntary registration. Best if your customers are mostly VAT-registered businesses (they don't care about the 20% mark-up since they reclaim it) and you have significant standard-rated costs to reclaim. Bad idea if you sell mostly to consumers, who effectively see your prices go up 20%.
£88,000 — once your annual taxable turnover falls below this, you can apply to deregister. It's lower than the registration threshold so businesses don't bounce in and out.
Historically annually with the Budget. The threshold has been frozen for several years — last raised April 2024. Sign up to VATLY's account to get notified if it changes.
You owe VAT from the date you should have registered, even though you didn't charge it. HMRC may also apply a late-registration penalty (5–15% of the unpaid VAT depending on lateness). The penalty is on top of the VAT itself.
Sales of goods to consumers in the EU (B2C) generally don't count toward the UK threshold once they're zero-rated as exports. But you may trigger an EU OSS registration. B2B sales follow place-of-supply rules. This is where a specialist accountant is worth their fee.