Find out when you need to register for VAT based on your turnover and growth. 2026/27 threshold.
Auto-calculated from monthly turnover
If different from calculated annual figure
You're below the VAT threshold
Your current annual turnover of £72,000 is below the £90,000 threshold.
VAT Registration Threshold
£90,000
Rolling 12 months
Headroom Remaining
£18,000
before you must register
Months Until Threshold
5
at current growth rate
Deregistration Threshold
£88,000
to deregister after registering
Progress to VAT Threshold80%
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.
Standard Rate (20%)
VAT charged on sales£18,000
VAT reclaimed on purchases£3,600
Net VAT owed to HMRC£14,400
You charge 20% on sales and reclaim VAT paid on business purchases. Best if you have high input costs.
Flat Rate Scheme (12%)
Gross turnover (inc VAT)£108,000
Flat rate applied£12,960
Total VAT owed to HMRC£12,960
Simplified scheme. Pay a fixed % of gross turnover. Cannot reclaim VAT on purchases (except capital assets over £2,000).
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 immediately.
What happens after you register?
Your sales price + 20% VAT = What you charge customers
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.
VAT Threshold FAQs
Can I voluntarily register for VAT below the threshold?
Yes. You can voluntarily register for VAT at any turnover level. This lets you reclaim VAT on business purchases, which can be beneficial if you sell to other VAT-registered businesses or have significant input VAT costs. However, you must then charge VAT on your sales and submit quarterly returns.
What is the Flat Rate VAT Scheme?
The Flat Rate Scheme is a simplified way to pay VAT. Instead of tracking VAT on every purchase and sale, you pay a fixed percentage of your gross turnover to HMRC. The percentage depends on your business sector and ranges from 4% to 16.5%. You can join if your VAT-taxable turnover is under £150,000 (excluding VAT). New businesses get a 1% discount in their first year.
When exactly must I register for VAT?
You must register if your VAT-taxable turnover exceeds £90,000 in any rolling 12-month period (the "backward look" test), or if you expect it to exceed £90,000 in the next 30 days alone (the "forward look" test). You have 30 days from the end of the month you crossed the threshold to notify HMRC. Registration takes effect from the first day of the second month after crossing.