When must you register for VAT in the UK? The £90,000 rolling 12-month test, 30-day rule, deadlines, late penalties and the £88,000 deregistration limit.
Many small business owners and freelancers in the UK know there is a VAT threshold. Far fewer know exactly how it is measured, and that is where costly mistakes happen. The threshold is not based on your tax year or your accounting year. It is a rolling 12-month test, checked at the end of every month, plus a separate 30-day "look-ahead" test. This guide explains both, with a worked example, the deadlines, what happens if you register late, and when you can deregister. Every figure is taken from GOV.UK.
If you need to add or remove VAT from a price once you are registered, use the free >UK VAT Calculator. For the formulas, see our guide on how to calculate VAT in the UK.
You must register for VAT if either of these applies:
You can register voluntarily below £90,000. You do not have to register if you sell only VAT-exempt or "out of scope" goods and services. Source: >GOV.UK – Register for VAT.
Source: >GOV.UK – VAT registration thresholds.
Taxable turnover is the total value of everything you sell that is not VAT-exempt or out of scope. GOV.UK says it includes:
It is your turnover (sales), not your profit. A sole trader with £95,000 of sales and £60,000 of costs is over the threshold, even though their profit is only £35,000. This is the most common misunderstanding.
At the end of every month, add up your taxable turnover for that month and the 11 months before it. If the total is more than £90,000, you have gone over the threshold.
GOV.UK sets the deadlines:
GOV.UK's own example: on 15 July your rolling 12-month turnover is £100,000, the first time it has gone over. You must register by 30 August, and your effective date of registration is 1 September.
Priya is a self-employed web designer. None of her services are exempt. Her monthly invoiced sales are:
Period Monthly sales Rolling 12-month total Nov 2025 – Oct 2026 (12 months at £7,000) £7,000 each £84,000 at end of Oct 2026 Nov 2026 £9,500 (Nov 2025's £7,000 drops out) £86,500 Dec 2026 £10,500 £90,000, not over £90,000 Jan 2027 £8,000 £91,000, over the thresholdTwo lessons. First, the test is "more than £90,000", so exactly £90,000 does not trigger it. Second, a single big month can push you over even when your average is below the threshold. Keep a simple spreadsheet of the rolling total.
To see what adding VAT does to her prices (£1,000 + 20% = £1,200), plug the figures into the >VAT calculator.
This test catches a single large contract. You must register if you realise your taxable turnover will go over £90,000 in the next 30 days on its own.
GOV.UK example: on 1 May you agree a £100,000 contract and will be paid at the end of May. You must apply by 30 May, and your effective date of registration is 1 May.
If a one-off spike pushes you over the threshold but you expect turnover to drop back, you can apply for a registration "exception". HMRC will consider it and write to say whether you get one. If you don't, HMRC registers you. Source: >GOV.UK – Register for VAT.
GOV.UK says that if you register late, you must pay VAT on any sales you've made since the date you should have registered. You usually can't go back and add VAT to invoices you have already sent, so it often comes out of your own pocket.
You may also have to pay a late registration penalty, worked out as a percentage of the VAT due (output tax less input tax) for the late period:
How late you registered Penalty rate Not more than 9 months 5% More than 9 months, up to 18 months 10% More than 18 months 15%There is a minimum penalty of £50. You won't be penalised if you have a reasonable excuse that HMRC or a tribunal accepts. Source: >GOV.UK – Late registration penalty (VAT Notice 700/41).
You can register even if your turnover is below £90,000. It can make sense if:
It is usually less attractive if your customers are consumers. They can't reclaim VAT, so you either put prices up by 20% or absorb the cost. Once registered, you must charge VAT, keep VAT records and file VAT returns with HMRC.
Source: >GOV.UK – Cancel your VAT registration.
£90,000 of VAT taxable turnover over a rolling 12-month period, or £90,000 expected in the next 30 days alone.
Turnover. It is the total value of your taxable sales, not what is left after costs.
No. It is a rolling 12 months, checked at the end of every month.
Yes. Zero-rated, reduced-rated and standard-rated sales all count. Exempt and out-of-scope sales do not.
30 days from the end of the month in which you went over. Your effective date of registration is the first day of the second month after that.
You can ask to cancel if your taxable turnover falls below £88,000. You must cancel within 30 days if you stop making taxable supplies.
All figures were checked on GOV.UK in October 2026. This is general information, not tax advice. For your own situation, speak to HMRC or an accountant.
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