What is the VAT threshold? When do I have to register?

Updated on May 16, 2022

What is the VAT threshold and when do I have to register for VAT?

Frequently asked questions about Value Added Tax (VAT) include: What is the threshold, and when is it required to register for VAT?

We’ll go over the VAT registration thresholds that apply to your company in this section.

Compulsory VAT Registration

The following situations necessitate VAT registration:

Over the past year, your VAT-taxable revenue has surpassed the current threshold of £85,000.
In order to register, you must do it within 30 days of when your monthly income exceeds the limit. The effective date of your registration is the first day of the second month following the day on which you cross the threshold.

Within the following 30 days, you expect your VAT-taxable revenue to surpass the threshold.
During that 30-day period, you must register. As soon as you know that you’re going to exceed the threshold, you need to register for tax purposes.

Only items or services free from VAT are sold, yet you purchase goods from EU VAT registered suppliers for more than £85,000
VAT registration may be required if you buy a VAT-registered business.
You should register ahead of time if you expect your revenue to meet the criteria soon. The failure to notify HMRC in a timely manner may result in a fine.

Is it possible to get an exception?

A “registration exception” is available if your taxable turnover exceeds the threshold for a short period of time.