How to Register for VAT

Value Added Tax (VAT) is charged in the United Kingdom on a wide range of goods and services, and VAT-registered businesses must pay it to HMRC. Not every business is required to register, however, as this depends on factors such as the level of turnover and the type of supplies a business makes. This article explains which businesses must register for VAT, which businesses are exempt, and how to register for VAT in the UK.

Do I need to register for VAT in the UK?

Most businesses operating in the UK are required to charge and pay VAT, although some are exempt because of the goods and services they provide or their level of turnover. Your business will need to register for VAT on a compulsory basis if it exceeds the VAT turnover threshold, or it may be exempt altogether. Given that the tax law in the UK is constantly evolving, it is essential to understand which category your business falls into and to keep this under review so that you continue to meet your obligations.

When does compulsory VAT registration apply?

The figures in this guide apply to the 2026-27 tax year and are reviewed each year.

Following the Spring 2024 Budget, the VAT threshold rose from £85,000 to £90,000 on 1^st April 2024. This means that you must register with HMRC for VAT if your turnover exceeded £90,000 (this is referred to as the “VAT threshold”) in the last 12 months or if you expect to reach this point in the next 30 days. When determining whether you need to register, you will need to calculate your level of turnover at the end of each month for the previous 12-month period.

You must also register for VAT, regardless of your level of taxable turnover, if both of the following apply:

• your business is established outside the UK, and
• you make taxable supplies of goods or services in the UK, or expect to do so within the next 30 days.

The turnover threshold at which a business can deregister for VAT also rose, from £83,000 to £88,000, on 1st April 2024.

VAT rates and thresholds are set by the government and reviewed at each annual Budget, which the Chancellor of the Exchequer delivers to Parliament. As a result, the registration threshold, the deregistration threshold and the VAT rates can change from one tax year to the next. Any change normally takes effect from the start of the following tax year or from a date set out in the Budget.

Northern Ireland follows the same registration and deregistration thresholds for taxable supplies as the rest of the UK. A separate threshold of £90,000 applies in Northern Ireland to acquisitions of goods from EU member states, for both registration and deregistration.

If your business’s turnover has exceeded the VAT threshold

It is important to ensure that you register for VAT promptly when required to do so. HMRC states that you must register within 30 days of the end of the month when your turnover exceeded the threshold. For example, if on 15th July 2026, your total taxable turnover for the last 12 months was £100,000, and this is the first time you have exceeded the VAT threshold, you must register by 30^th August 2026. This then means that your effective date of registration is 1^st September 2026.

If your business’s turnover will exceed the VAT threshold in the next 30 days

If you need to register for VAT because your total taxable turnover is going to exceed the £90,000 threshold in the next 30 days, you must do so by the end of that 30-day period. In this case, your effective date of registration is the date you realised you were going to exceed the threshold, not the actual date that your turnover exceeded the VAT threshold. For example, if on 1^st May 2026, you agree to a £100,000 contract to provide goods or services for which you know you will be paid at the end of May, you will need to submit your VAT registration application by 30^th May 2026. This means that your effective date of registration will be 1^st May 2026.

If your business’s turnover will temporarily exceed the VAT threshold

If you expect your turnover to rise above the VAT threshold but then drop immediately afterwards (i.e. it is temporary), then you may be able to apply for an exception from registration by completing and submitting a VAT1 registration form to HMRC. To support your application, you will be asked to provide proof that your taxable turnover will not exceed the deregistration threshold of £88,000 in the next 12 months.

When does voluntary VAT registration apply?

If your business has a turnover below the VAT threshold, you can choose to register for VAT on a voluntary basis. Your business may choose to register for VAT because of the advantages offered, including the ability to reclaim VAT on expenses paid. This can be especially advantageous for businesses that only supply zero-rated goods and services, as they can reclaim VAT without charging VAT to customers.

Does all turnover count towards the VAT threshold?

No, not all turnover counts towards the VAT threshold. To calculate if your business meets the VAT threshold, you will need to work out the total value of all the taxable supplies made in the UK (this includes the Isle of Man), including:

• Standard-rated goods and services (20%)
• Reduced-rated goods and services (5%)
• Zero-rated goods and services (0%)
• Reverse charge services received from overseas.
• Goods hired or loaned to customers
• Business goods used for personal reasons
• Goods bartered, part-exchanged or gifted
• Building work to a value over £100,000 that your business undertook for itself

You do not need to include supplies that are deemed to be exempt and outside the scope of VAT. VAT-exempt supplies include land, insurance, postal services, education, training, finance, health and welfare, sport, gaming, culture, charitable fundraising, and antiques.

In addition, certain goods and services are considered “out of scope” for VAT, including:

• goods or services you purchase and use outside of the UK
• statutory fees, e.g. city congestion charges
• goods sold as part of a hobby, and
• donations to a charity (if given without receiving anything in return)

Do I need to pay VAT if my business is based outside the UK?

A business must register for VAT if it is established outside the UK and supplies goods or services to the UK, or expects to do so in the next 30 days. In this situation there is no turnover threshold, so registration can be required from the first taxable supply.

How do I register for VAT?

Most businesses operating in the UK can simply register for VAT on the HMRC website. At the start of this process, you may need to create a Government Gateway account, which you can later use to submit your VAT returns to HMRC and pay any VAT owed. You can choose to register your business for VAT yourself or ask a professional agent to do this on your behalf.

It is also possible to register for UK VAT by post by completing and submitting form VAT1 to HMRC. You will need to register by post if you want to apply for a “registration exception”, join the Agricultural Flat Rate Scheme or register parts of a corporate body under different VAT numbers.

When completing the VAT registration form, you will be asked to provide details relating to:

• The person making the VAT declaration and their signature
• Where your business is based
• The type of business (i.e. sole trader, general partnership, limited partnership, body corporate, limited liability partnerships, charity, trust, registered society, or unincorporated society)
• Business contact details
• Whether you are applying for voluntary or compulsory VAT registration
• Whether you have exceeded the VAT threshold in the last 12 months or expect to in the next 30 days
• Turnover, and
• Activities carried out by the business.

A key part of the VAT registration process is selecting the appropriate VAT accounting scheme for your business. There are four main types of VAT accounting scheme:

1. Standard VAT accounting: this scheme is used by the majority of businesses. Using this method, you charge and collect VAT for each sale you make, prepare and submit a VAT return each quarter (or year), and pay the amounts collected to HMRC within the required period.
2. Annual VAT accounting: a VAT return is prepared and submitted to HMRC every 12 months, but VAT payments are made in instalments during the year, based on the previous return.
3. Flat Rate VAT scheme: for smaller businesses, it may be possible to register for the Flat Rate VAT scheme. Using this method, you simply pay a percentage of your turnover to HMRC as VAT. It is important to note, however, that if you register for Flat Rate VAT, you will not be able to reclaim the VAT on your purchases (with the exception of some capital assets with a value in excess of £2,000). The exact flat rate you pay depends on the type of business. If you wish to join the Flat Rate VAT scheme, you can do so online or by completing form VAT600 FRS. You can join the HMRC VAT flat rate scheme if you are VAT registered and you expect your turnover to be £150,000 or less (excluding VAT) in the next 12 months.
4. Cash VAT accounting: Using this method, HMRC makes the assumption that you collect or pay VAT when money is exchanged rather than when you raise an invoice for your goods or services. The benefit of this method is that VAT is only paid when you receive payment of your invoices. To use cash accounting, you must be registered for VAT and have an estimated VAT taxable turnover of £1.35 million or less in the next 12 months. HMRC advises that you do not need to tell them if you wish to use cash accounting.

What happens once I have registered for VAT?

Once you have completed the VAT registration process with HMRC, you will receive:

• Your VAT number
• Details about when and how to submit your first VAT return and payment
• Your VAT registration date (“effective date of registration”)

These details will be available in your online VAT account or sent to you in writing if you post your application. The effective date of registration is the date when your business can start charging VAT and reclaiming VAT paid on your business expenses. The amount of VAT that can be reclaimed in each period is deducted from the amount of VAT you owe, hence reducing the final amount you need to pay HMRC.

As a VAT-registered business, you effectively act as a tax collector on behalf of HMRC. Once you are registered, you must add VAT where applicable to your prices, include VAT on all invoices you send to customers, prepare and submit a VAT return to HMRC each quarter or year, and pay the amount owed – normally on a quarterly basis, although monthly or annual payments are also possible. You must also keep digital VAT records. These include records of your sales and purchases, a summary of your VAT, and your VAT invoices. They must be stored for a minimum of six years and be accurate, complete and readable.

If your circumstances change and your business is no longer eligible to be VAT registered, you will need to cancel your VAT registration with HMRC. This may apply, for example, if you cease trading, you stop selling VAT-taxable goods and services, or your business joins a VAT group. You must cancel your VAT registration within 30 days from the date you cease to be eligible, or you risk a penalty.

What VAT should I charge in the UK?

Once you are registered for VAT in the UK with HMRC, you will need to charge your customers VAT on:

• The goods and services you sell
• Hiring or loaning goods to someone
• The sale of business assets
• Commission
• Business goods used for personal reasons, and
• ‘Non-sales’ like bartering, part-exchange and gifts

The rate of VAT that you must charge your customers will fit into one of three categories:

VAT rate	Description
Standard rate of 20%	The standard rate applies to most goods and services sold in the UK
Reduced rate of 5%	The reduced rate is for certain goods and services such as mobility aids for older people, child car seats and home energy
Zero rate (0%)	Zero rate VAT is applicable to certain goods and services such as children’s clothes, food, and building services or equipment for blind or partially sighted people.

Some goods and services are completely exempt from paying VAT, including postage stamps, care or medical treatment, education and vocational training, and property transactions. To accurately calculate the VAT amount applicable to your products or services, consider using a VAT calculation tool.

Some goods and services are completely exempt from paying VAT, including postage stamps, care or medical treatment, education and vocational training, and property transactions. To confirm the correct rate for particular goods or services, you can check the VAT rates published by HMRC. To accurately calculate the VAT amount applicable to your products or services, consider using a VAT calculation tool.

Changes to VAT for private schooling

The supply of education has long been exempt from VAT, which historically meant that private schools did not charge VAT on their fees. This changed under the Finance Act 2025. Since 1 January 2025, the standard 20% rate of VAT applies to fees for education and boarding supplied by private schools in the UK. Affected schools must therefore register for VAT once their taxable turnover exceeds the registration threshold, charge VAT on their fees, and may reclaim input VAT on related costs, subject to the usual partial-exemption rules.

Final words

Registering for VAT can confer considerable advantages to businesses operating in the UK, including the ability to reclaim VAT on expenses paid. Indeed, you can even claim a refund of VAT on items purchased up to four years ago if you are still using them. Thankfully, the HMRC has made the process of registering for VAT, submitting VAT returns, and paying VAT quarterly or annually relatively straightforward. Your accountant can handle all aspects of your VAT returns on your behalf, including working out the final balance you need to pay. VAT must then be paid no more than one month and seven days after the end of the VAT period.

At Uniwide Formations, we have a team of experts who are experienced in forming UK companies. Our specialists can take care of all the paperwork and registration of your limited company. We can also help you with VAT registration for your company.

Services You May Need

VAT Registration Assistance

Our accounting partner prepares and submits your VAT application to HMRC.

Intoduction to an Accountant

Get matched with a qualified UK-based accountant for your business.