Definition: The VAT registration threshold is the level of taxable turnover at which a UK business must register for VAT with HMRC: currently £90,000. If your taxable turnover goes over £90,000 in any rolling 12-month period, you must register. Taxable turnover is the total value of everything you sell that is not VAT exempt or outside the scope of VAT.
Not sure where you stand? Enter your last 12 months in the tracker below — it adds them up instantly. Once registered, our free VAT calculator works out the VAT on every sale.
Enter your taxable turnover for each of the last 12 months (Month 1 = oldest). Leave a month blank if it was £0.
Already registered? Use the full UK VAT Calculator to add or remove VAT on any amount — it's free.
At the end of every month, look back over the previous 12 months and add up your taxable turnover. If the total goes over £90,000, you have passed the threshold — even if your tax-year or financial-year figures look fine.
This is where businesses get caught out, because the test never resets: every month, the oldest month drops off and the newest is added, so a few strong months can quietly push you over.
Worked example: a growing joinery business checks its figures at the end of Month 12:
| Month | Taxable turnover | Rolling 12-month total |
|---|---|---|
| Month 1 | £6,200 | £6,200 |
| Month 2 | £6,800 | £13,000 |
| Month 3 | £7,100 | £20,100 |
| Month 4 | £6,500 | £26,600 |
| Month 5 | £7,400 | £34,000 |
| Month 6 | £7,900 | £41,900 |
| Month 7 | £8,200 | £50,100 |
| Month 8 | £7,600 | £57,700 |
| Month 9 | £8,400 | £66,100 |
| Month 10 | £8,100 | £74,200 |
| Month 11 | £8,600 | £82,800 |
| Month 12 | £8,900 | £91,700 |
The 12-month total is £91,700 — over the threshold. If Month 12 ended on 31 March, the business must register by 30 April, with an effective date of 1 May: the first day of the second month after it went over.
Run your own figures through the tracker above every month — it takes a minute and is the easiest way to never miss the deadline.
The second test looks forwards, not backwards. You must register if you expect your taxable turnover in the next 30 days alone to go over £90,000.
Example: on 1 May, you agree a single contract worth £100,000, payable at the end of May. Your next-30-days turnover alone is over the threshold, so you must register: apply by the end of that 30-day period (by 30 May). Your effective date of registration is 1 May — the date you realised you would go over, not the date the money arrives.
One big order is enough to trigger this test. Quoting for a contract that would take one month's taxable sales over £90,000? Plan your registration before the work starts.
Only taxable turnover counts — but "taxable" is wider than most people think:
Counts towards the £90,000:
Does not count:
One exception to that last point: land or buildings sold under an option to tax must be included, unless the sale was zero-rated.
Not registered yet? You are not charging VAT, so just add up your actual sales values. After registering, see our guide to removing VAT from a price for the net figure behind any VAT-inclusive amount.
Pass the rolling 12-month test and two dates matter:
Pass on the next-30-days test instead, and you must register by the end of that 30-day period; your effective date is the date you realised. Our step-by-step VAT registration guide walks you through the application.
Do not let the dates slip. If you register late, you must pay HMRC the VAT on sales made since the date you should have registered, and you might pay a penalty, depending on how much you owe and how late the registration is.
Went over on a one-off spike — one large order, one unusually good month? You may not have to register: GOV.UK lets you apply for a registration "exception" when your taxable turnover goes over the threshold only temporarily.
Under VAT Notice 700/1, you can be excepted if you can show HMRC that your taxable supplies will not go over the deregistration threshold — £88,000 — in the next 12 months. You must apply to HMRC to make it official; it is never automatic.
HMRC considers your application and writes to confirm. If they are not satisfied, they register you from the day you were liable — so apply early, with a full explanation. An exception is not a permanent pass either: keep checking your rolling total monthly, as you can become liable again.
Is the VAT threshold based on the tax year?
No. The threshold is a rolling 12-month test, not a tax-year test: at the end of every month, add up your taxable turnover for the previous 12 months and compare it with £90,000.
Do zero-rated sales count towards the threshold?
Yes. Zero-rated sales are taxable supplies at 0%, so they count in full towards the £90,000 threshold, even though no VAT is charged on them. Only exempt sales and sales outside the scope of VAT do not count.
What is the VAT deregistration threshold?
£88,000. If you are registered and your taxable turnover falls below £88,000, you can ask HMRC to cancel your registration. You must cancel if you stop trading or stop making taxable supplies.
What if I only go over the threshold once?
You may not have to register. If your turnover went over £90,000 temporarily, you can apply to HMRC for a registration exception, showing that your taxable supplies will not go over the £88,000 deregistration threshold in the next 12 months. If HMRC refuses, it will register you from the date you became liable.
When will my registration take effect if I cross the threshold?
On the rolling 12-month test, your effective date is the first day of the second month after you went over — go over in March and you are registered from 1 May, applying by 30 April. On the next-30-days test, your effective date is the date you realised you would go over.
Crossed the threshold and need the numbers for your first invoices? Enter any amount in our free UK VAT calculator to see the VAT and net price instantly.
Related guides: VAT Registration: How to Register for VAT in the UK · VAT Returns: Deadlines, Boxes and How to File · How to Remove VAT from a Price