How to Register Your Business for VAT With HMRC in the UK

When is VAT registration compulsory?

The main UK registration threshold is based on taxable turnover, not total profit. Taxable turnover is the value of the goods and services you supply that are not exempt from VAT.

You must register with HMRC if either of these tests applies:

• Your total taxable turnover for the previous 12 months goes above £90,000.
• You expect your taxable turnover to go above £90,000 during the next 30 days.

The £90,000 threshold remains the current standard registration threshold in HMRC's guidance for the 2026 to 2027 period.

The £90,000 test is based on a rolling 12 months

The normal threshold test is not limited to a tax year or accounting year. You need to monitor taxable turnover over the previous 12 months.

If the rolling total goes above £90,000, you normally become liable to register even if your turnover for a calendar or financial year is lower.

When must you tell HMRC after crossing the threshold?

If your taxable turnover for the previous 12 months goes above £90,000, you must normally notify HMRC within 30 days of the end of the month in which you exceeded the threshold.

The normal effective date of registration is the first day of the second month after the month in which the threshold was exceeded.

HMRC gives the example of a business whose rolling turnover first exceeds the threshold during July: notification is due by 30 August and the normal effective date is 1 September.

A different rule applies if you expect to exceed the threshold within 30 days

You must also register if you realise your taxable turnover will exceed £90,000 during the next 30 days.

In this situation, you must notify HMRC by the end of that 30-day period. Your effective date of registration is the date you first realised that the threshold would be exceeded, rather than the later date when the sales actually take place.

Can you register voluntarily below £90,000?

Yes. HMRC allows voluntary VAT registration when taxable turnover is below the compulsory threshold, provided you are making or intend to make qualifying taxable supplies.

Voluntary registration can allow a business to charge VAT and reclaim eligible input VAT from its effective date of registration, but it also creates ongoing VAT accounting, record-keeping and return obligations.

Overseas businesses may need to register regardless of turnover

A business established outside the UK can face different registration rules. HMRC states that registration is required regardless of the normal £90,000 threshold when you and your business are based outside the UK and you make, or expect to make within the next 30 days, taxable supplies of goods or services in the UK.

These businesses should check HMRC's rules for non-established taxable persons because the normal domestic threshold should not automatically be applied.

Taking over a VAT-registered business can affect the threshold test

If you take over a VAT-registered business, HMRC can require you to consider the combined taxable turnover of the business you acquire and any existing business you already operate.

If the relevant combined turnover is above the registration threshold, registration may be compulsory.

What does a limited company need to register?

HMRC states that a limited company should have the following information ready:

• Company registration number.
• Business bank account details.
• Unique Taxpayer Reference, or UTR.
• Details of annual turnover.
• Estimated taxable turnover for the next 12 months.

You may also need information relating to Self Assessment, Corporation Tax and PAYE.

What do individuals and partnerships need?

HMRC lists a different information set for an individual or partnership, including:

• National Insurance number.
• An identity document such as a passport or driving licence.
• Bank account details.
• UTR, if you have one.
• Annual turnover.
• Estimated taxable turnover for the next 12 months.

HMRC may also ask for information from Self Assessment records, payslips and a P60.

Most businesses can register online

HMRC says businesses can usually register for VAT online. You must sign in to the official HMRC service. If you do not already have Government Gateway credentials, you can create them when you start.

You do not need to complete the application in one session. HMRC allows you to save the registration and return to it later.

Some businesses must use postal forms instead

Certain registrations cannot use the standard online route. HMRC requires postal registration with Form VAT1 or another specified form in cases that include:

• Applying for an exception from registration because turnover exceeded the threshold temporarily.
• Joining the Agricultural Flat Rate Scheme.
• Certain VAT group and divisional registrations.
• Some local authority registrations.
• Applications made by insolvency practitioners on behalf of a business.

HMRC also publishes separate forms for particular Northern Ireland and specialist VAT situations.

What if your turnover only exceeded the threshold temporarily?

You may be able to apply for a registration exception when taxable supplies have gone over the registration threshold during the previous 12 months but you can demonstrate that taxable supplies will not exceed the deregistration threshold during the next 12 months.

The current deregistration threshold is £88,000.

HMRC requires applicants seeking this exception to obtain and complete both Form VAT1 and Form VAT5EXC. If HMRC refuses the exception, it can use the VAT1 information to register the business from the date it was originally liable.

Late registration can create backdated VAT liabilities

If you register late, HMRC will normally register you from the date you should legally have been registered.

You must account for VAT due from that date even if you did not charge VAT to customers at the time. HMRC also warns that a penalty may be due depending on the amount owed and how late the registration was.

Eligible input tax may be available to offset some VAT liabilities where the normal evidence and recovery rules are satisfied.

Why the effective date of registration matters

Your effective date of registration determines when you become responsible for accounting for VAT and when eligible VAT on business purchases can potentially be reclaimed.

For compulsory registration, HMRC calculates the date according to the statutory threshold rule that triggered registration. For voluntary registration, HMRC can agree an appropriate effective date under the relevant rules.

Do not start using a later date simply because your registration application was submitted late; HMRC can backdate compulsory registration to the date the legal liability arose.

How long does VAT registration take?

HMRC does not give one guaranteed nationwide processing time for every application. It states that if you have not heard from HMRC after 40 working days, you should contact the VAT Registration Service to make sure your application was received.

HMRC specifically advises not to contact the service before that point because doing so may delay processing. Applications can also take longer when HMRC asks for additional information.

Postal applications usually take longer than online applications.

What happens after HMRC approves the registration?

After registration, HMRC provides:

• A 9-digit VAT registration number.
• Confirmation of the effective date of registration.
• Information about setting up or using the business tax account.
• Information about the first VAT Return and payment.

The VAT registration number must be included on VAT invoices issued by the business.

Most registered businesses enter Making Tax Digital for VAT

HMRC states that it will normally sign up a newly registered business for Making Tax Digital for VAT unless the business is exempt or has applied for and obtained an exemption.

This means registration is only the first step. A VAT-registered business must also maintain the required records, submit VAT Returns and account for VAT according to the applicable rules.

Common mistakes to avoid

• Checking turnover only at the end of a financial or calendar year instead of monitoring the previous 12 months.
• Using profit rather than taxable turnover to test the £90,000 threshold.
• Ignoring the separate rule when you expect taxable turnover to exceed £90,000 within the next 30 days.
• Assuming an overseas business can always use the normal £90,000 domestic threshold.
• Missing the 30-day notification deadline after becoming liable to register.
• Assuming a late application moves the effective registration date forward.
• Using the online service when HMRC requires a postal form for your particular registration.
• Failing to include accurate turnover estimates or business tax information.
• Ignoring an HMRC request for more information during processing.
• Charging or accounting for VAT from the wrong effective date.
• Forgetting to set up VAT services and comply with Making Tax Digital obligations after registration.