Do you need to register for VAT?

If you’re just starting a business or thinking about selling products or services in the UK, one question you might have heard is: “Do I need to register for VAT?” VAT can sound complicated, but don’t worry: by the end of this post, you’ll know when a business needs to register in the UK, without any confusing jargon.

What is VAT anyway?

VAT stands for Value Added Tax. It’s a tax that most businesses must charge on the things they sell and pay on the things they buy. Think of it like a small extra cost added to many goods and services.

But not all businesses have to register for VAT, and not all must charge it. So how do you know when you need to?

When does a business have to register for VAT?

When your taxable turnover goes over £90,000

The most important rule is about how much your business sells, specifically its taxable sales.

If your taxable turnover goes over £90,000 in a rolling 12-month period, you must register for VAT. A “rolling 12-month period” means the last 12 months at any point in time, not just a calendar or tax year.

Taxable turnover is the total of everything you sell that’s not VAT-exempt.

The threshold is set by the government and changes from time to time, so it’s important to check the current figure on GOV.UK. As at 16 September 2026, it is £90,000.

Once you go over the threshold, you have to register within 30 days of the end of the month in which you went over it.

You must also register if you expect your taxable turnover to go over £90,000 in the next 30 days alone. In that case, you must register by the end of that 30-day period.

What counts towards the £90,000?

Not everything you sell counts.

Included in taxable turnover:

Standard-rated sales (the most common; 20% VAT)
Reduced-rate sales (e.g. some home energy work at 5%)
Zero-rated sales (0% VAT, but they still count towards the £90,000)

Not included:

Exempt sales (like some financial services or education services)
Private sales that aren’t part of your business

If most of what you sell is exempt, your turnover might be above £90,000 and you still may not need to register. We explain that next.

What if your business makes exempt sales?

Some businesses sell mainly VAT-exempt services, for example:

Insurance
Some education and training
Health services

If all (or almost all) of your sales are exempt, they don’t count towards the £90,000 threshold, and you might never have to register for VAT, no matter how much money you make.

This can be surprising, so if you’re unsure whether your sales are exempt or taxable, it’s worth checking HMRC’s guidance or speaking to an accountant.

Can you register voluntarily?

Yes. Even if you don’t need to, you can choose to register for VAT. This is called voluntary VAT registration.

Some reasons business owners do this:

They want to look more established
They want to claim back VAT on purchases
They work mostly with VAT-registered customers who can claim it back

But beware: once registered, you must charge VAT on your sales and send regular VAT returns.

What happens after you register?

Once you’re registered for VAT, you must:

Charge VAT on your sales
Keep VAT records
Send VAT returns to HMRC (usually every quarter)

You’ll also get a VAT number to put on your invoices.

Final thoughts

Registering for VAT might sound confusing at first, but it becomes manageable once you understand the basics:

If your taxable turnover in the last 12 months goes over £90,000, you must register.
Exempt sales usually don’t count towards the threshold.
You can register early if you want to.
Once registered, you’ll handle VAT on sales, records and returns.

Our advice is to keep good records and check regularly whether you have gone over the threshold. If your turnover is around £7,500 a month, you need to keep a close eye on it.

You can register for VAT online on GOV.UK.

Contact The Small Business Service if you need further advice or help with your VAT returns.