12-month turnover projection
| Month | Monthly Turnover | Cumulative (12-Month Rolling) | Headroom |
|---|
Standard VAT vs Flat Rate Scheme
How much VAT would you owe once registered? Based on your projected annual turnover at threshold.
Understanding the VAT threshold
The UK VAT registration threshold for 2026/27 is £90,000. If your taxable turnover exceeds this amount in any rolling 12-month period, you are legally required to register for VAT with HMRC.
The two tests for VAT registration
Backward look test: At the end of any month, if your total taxable turnover for the previous 12 months has gone over £90,000, you must register. You have 30 days from the end of that month to notify HMRC.
Forward look test: At any point, if you expect your taxable turnover to exceed £90,000 in the next 30 days alone (for example, from a single large contract), you must register by the end of that 30-day period.
What happens after you register?
Once registered, you charge VAT on your sales and can reclaim VAT on business purchases. You submit quarterly VAT returns to HMRC. The difference between what you charge and what you reclaim is paid to (or refunded by) HMRC.
Can you deregister later?
If your taxable turnover drops below the deregistration threshold of £88,000 and you expect it to stay below, you can apply to deregister. Note this is £2,000 lower than the registration threshold to prevent businesses constantly registering and deregistering.
Voluntary registration
You can register voluntarily even if your turnover is below £90,000. This is often worthwhile if you sell to other VAT-registered businesses (they can reclaim VAT, so your prices stay competitive) or if you have significant business costs that include VAT.
Worked examples
Each example below was run through the calculator above with the inputs shown. Turnover means VAT taxable turnover: everything you sell that is not exempt or outside the scope of VAT, including zero-rated sales.
Growing business: £82,000 over the last 12 months, £6,800 a month, growing 2% a month
The business is at 91% of the threshold with £8,000 of headroom. The calculator rolls the 12-month total forward one month at a time, adding each new month at 2% growth and dropping the oldest month at the current £6,800. On that basis the rolling total passes £90,000 in 12 months. The assumption to watch is the dropped month: if last year's matching month was a quiet one, you will cross sooner, so put your real rolling figure in the third box each month.
Already over: £93,500 in the last 12 months
The rolling total is £3,500 over the threshold, so the result reads "You must register for VAT". HMRC's rule is to register within 30 days of the end of the month in which you went over, and your registration takes effect from the first day of the second month after. GOV.UK gives this example: turnover first passes £90,000 on 15 July, so you must register by 30 August, effective from 1 September. From that date you owe VAT on your sales whether or not you charged it.
Consultant on £95,000 choosing a VAT scheme
A management consultant (flat rate 14%) spends £600 a year on goods. On standard accounting the calculator shows £15,200 to pay, using its assumption that a fifth of turnover is spent on purchases carrying VAT. On the Flat Rate Scheme the rate applies to VAT-inclusive turnover of £114,000. Because £600 is under 2% of that and under £1,000, the limited cost business rate of 16.5% replaces 14%, giving £18,810. Enter £3,000 of goods instead and the sector rate of 14% applies, bringing the flat rate bill to £15,960, still above standard accounting under the same purchase assumption. Replace that assumption with your real costs before deciding.
Rules that change the answer
Rolling 12 months, not the tax year
The test is your taxable turnover for the last 12 months, checked at the end of every month, or turnover you expect in the next 30 days alone. The threshold is £90,000 and you must go over it to be caught (GOV.UK: Register for VAT, checked 30 October 2026).
Late registration costs the VAT you did not charge
If you register late you must pay VAT on sales made since the date you should have registered, and a penalty may apply depending on how much you owe and how late you are (same source).
Flat Rate Scheme limits
You can join if you expect VAT taxable turnover of £150,000 or less, excluding VAT, in the next 12 months. You must leave if, on the anniversary of joining, your turnover in the last 12 months was more than £230,000 including VAT, or you expect it to be in the next 12 months. First-year registrations get 1% off the flat rate, and you cannot reclaim VAT on purchases except certain capital assets over £2,000 (GOV.UK: VAT Flat Rate Scheme, checked 30 October 2026).
Common mistakes
Counting only the tax year. A business can pass £90,000 over a rolling 12 months that spans two tax years without either tax year reaching it.
Leaving out zero-rated sales. They count towards taxable turnover. Exempt and out-of-scope sales do not.
Choosing the Flat Rate Scheme on the sector rate alone. If you buy few goods, the 16.5% limited cost rate applies instead, as the third example shows. The Flat Rate Scheme guide explains which purchases count as goods.
How this calculator works: it compares your rolling 12-month turnover (or monthly turnover times 12 if you leave the rolling box empty) with £90,000, then projects 12 months ahead at your growth rate. You must register when the rolling total goes over £90,000, not when it reaches it, or when a single projected month goes over £90,000 on its own (the 30-day forward look test). The scheme comparison assumes 20% of turnover is spent on standard-rated purchases. Thresholds were checked against GOV.UK on 30 October 2026; every source is listed on our methodology page.