If you’re running a small or medium-sized business in the UK, understanding the VAT threshold is crucial to staying compliant and avoiding fines.
What is the UK VAT Threshold?
The VAT registration threshold is the amount of taxable turnover your business can earn in a 12-month period before you must register for VAT with HMRC.
As of 2025, the VAT threshold is £90,000.
If your business turnover reaches or exceeds this amount within any rolling 12-month period, not just your financial year, you are legally required to register for VAT.
When Do You Need to Register for VAT?
You must register for VAT with HMRC:
- If your taxable turnover goes over £90,000 in the past 12 months
- If you expect to exceed £90,000 in the next 30 days alone
There’s no grace period. As soon as you meet either condition, you have 30 days to register. Late registration can lead to penalties, interest, and backdated VAT payments.
Voluntary VAT Registration: Is It Worth It?
Even if your turnover is below the threshold, you can register voluntarily. This can be beneficial if:
- You want to claim back VAT on business expenses
- You sell mainly to other VAT-registered businesses
- You want to appear more established and credible
However, voluntary registration also means more admin and potential cost increases for your customers, so it’s worth reviewing carefully.
How to Register for VAT
You can register:
- Online via HMRC – the most common route
- Or by paper form VAT1, if you have specific reasons
You’ll need to provide:
- Your business details (name, trading style, address)
- Your turnover figures
- The date you exceeded the threshold (or expect to)
After registration, HMRC will send you a VAT number, and you’ll need to start:
- Charging VAT on your invoices
- Submitting regular VAT returns (usually quarterly)
- Paying any VAT due to HMRC
Cloud Bookkeeping Warwick Tips for VAT Success
As a team who support clients daily with VAT returns and compliance, here are our top practical tips:
- Monitor your turnover monthly – not annually. Use cloud software or spreadsheets to track your rolling 12-month income.
- Don’t wait until you cross the line. Start preparing if you’re getting close to the threshold so you’re not caught off guard.
- Understand your VAT scheme options – the Flat Rate Scheme, Annual Accounting, and Cash Accounting Scheme may all be relevant.
- Get professional support early. VAT is complex, especially if you deal with international sales, digital products, or partial exemptions.
How We Help
At Cloud Bookkeeping Warwick, we manage VAT registration, filing, and compliance for businesses across Warwick and the UK. We’ll:
- Keep you on top of your turnover
- Advise you when to register (and if it’s beneficial to do so voluntarily)
- Ensure your VAT returns are filed accurately and on time
- Liaise with HMRC on your behalf
You’ll have peace of mind knowing everything is taken care of so you can focus on growing your business.
Book a Free VAT Consultation
If you’re unsure whether you need to register for VAT, or if you’re ready to hand it over to a professional team, we’re here to help.
Get in touch with Cloud Bookkeeping Warwick today to book your free consultation.