VAT Registration Threshold 2026-27

The 2026-27 VAT registration threshold

You must register for VAT when your VAT-taxable turnover exceeds £90,000 in a rolling 12-month period. This threshold has been frozen at £90,000 since April 2024, having increased from £85,000.

When the clock starts

VAT registration is triggered when you exceed £90,000 in any rolling 12-month period — not the calendar year or tax year. You must notify HMRC within 30 days of exceeding the threshold and register within that period. Failure to register on time incurs a penalty based on the VAT due from the date you should have registered.

Voluntary registration

You can register voluntarily even before reaching the threshold. Reasons to consider early registration:

• You supply VAT-registered businesses (B2B) — they reclaim the VAT you charge, so it costs them nothing and you can reclaim VAT on your own purchases.
• You have significant VAT-able expenses and want to reclaim input tax.
• VAT registration may signal credibility to larger clients.

When to avoid voluntary registration

If your clients are primarily consumers (B2C) or VAT-exempt businesses, adding 20% VAT to your invoices means they cannot reclaim it. This either reduces your competitiveness or you must absorb the cost by reducing your net price.

Deregistration threshold

You can deregister when your VAT-taxable turnover falls below £88,000 and is expected to remain below that level.