VAT is the most over-thought tax in the UK. The actual registration takes 20 minutes online. The real questions are: do I have to? should I, even if I don't have to? and which scheme should I pick? This guide answers all three before walking you through HMRC's form.
Direct answer
The threshold is £90,000 of rolling 12-month taxable turnover. Above it, registration is mandatory and the penalties for late registration are painful. Below it, registration is voluntary — and sometimes a smart commercial move.
- Threshold (2026/27)
- £90,000
- Standard rate
- 20%
- Return frequency
- Quarterly
- Cost to register
- £0
Checklist
Quick checklist
- Confirm your rolling 12-month taxable turnover
- Decide if voluntary registration helps you
- Pick a scheme (Standard, Flat Rate, Cash, Annual)
- Register at gov.uk/register-for-vat
- Choose your effective date carefully
- Sign up for Making Tax Digital
- Update invoice templates with VAT number once issued
Section 01
When you MUST register
- Your taxable turnover in any rolling 12 months exceeds £90,000 — register within 30 days of the end of that month.
- You expect to exceed £90,000 in the next 30 days alone — register by the end of that 30-day period.
- Taxable turnover means standard, reduced and zero-rated sales — NOT exempt sales (e.g. insurance, education).
- Late registration penalties are 5–15% of the VAT you should have charged, plus the back-tax itself.
Section 02
When voluntary registration makes sense
If most of your customers are VAT-registered businesses, voluntary registration is often a free upgrade — they reclaim the VAT you charge, and you reclaim VAT on your costs. If you sell mainly to consumers, voluntary registration usually just makes you 20% more expensive overnight.
- B2B service with significant costs (software, contractors) — almost always worth it.
- B2C with thin margins (cafes, retail) — almost never worth it voluntarily.
- Pre-revenue with big setup costs — register to reclaim VAT on equipment.
Section 03
Pick the right scheme before you register
- 01
Standard accounting
Charge 20% on sales, reclaim VAT on purchases, pay the difference quarterly. Default and fine for most. Requires accurate invoice-by-invoice records.
- 02
Flat Rate Scheme
Pay a fixed percentage of gross turnover (typically 7.5–16.5% depending on trade) and keep the difference. Simpler bookkeeping. Worse for businesses with lots of VATable costs. Limited to <£150k turnover.
- 03
Cash accounting
Account for VAT when invoices are paid, not raised. Helps cashflow if customers pay slowly. Available under £1.35m turnover.
- 04
Annual accounting
One return a year with payments on account. Cuts admin but suits stable, predictable businesses.
Section 04
The registration — step by step
- 01
Sign in to your Government Gateway
Use the business account if you have one; otherwise add VAT to your existing personal account.
- 02
Go to gov.uk/register-for-vat
Pick 'taxable turnover went over £90,000' or 'I want to register voluntarily'.
- 03
Confirm business details
Trading name, address, type (sole trader / Ltd), nature of business, expected turnover, bank details for refunds.
- 04
Pick your effective date of registration
Cannot be more than 4 years in the past or in the future. Most people pick the start of the next month.
- 05
Pick your scheme
Standard is the safe default. Flat Rate must be applied for separately if you want it.
- 06
Submit and wait for your VAT number
Usually arrives within 30 days. You can — and should — charge 'VAT pending' on invoices in the meantime and reissue once it arrives.
- 07
Sign up for Making Tax Digital
Once registered, you must file VAT returns through MTD-compatible software (Xero, QuickBooks, FreeAgent, Sage). Bridging software is also allowed if you live in spreadsheets.
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