Do I need to register for VAT once my turnover reaches £90,000?

Full answer

VAT registration becomes compulsory once your taxable turnover exceeds £90,000 within any rolling 12-month period for 2026/27 -- this is a continuous test based on the trailing 12 months, checked at the end of every month, not a fixed annual assessment tied to the tax year or your accounting year end. As soon as you realise your turnover for the past 12 months has exceeded £90,000, you have 30 days from the end of that month to register with HMRC, and VAT becomes chargeable on your sales from the first day of the second month after the threshold was crossed. There is a separate rule for sudden, sharp growth: if you expect your turnover in the next 30 days alone to exceed £90,000, you must register immediately, with VAT due from the date you realised this. Failing to register on time can result in penalties and, importantly, you may still owe HMRC the VAT that should have been charged on sales made after you were required to register, even if you did not actually charge your customers VAT at the time, meaning the shortfall often has to come out of your own margin. If your turnover is only temporarily above £90,000 -- for example due to a one-off large contract -- you can apply to HMRC for an exception from registration, but this is not automatic and must be requested with supporting evidence that your turnover will fall back below the deregistration threshold of £88,000 within the next 12 months.

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