What is the VAT registration threshold for 2026/27?

Full answer

Businesses and sole traders must register for VAT once their taxable turnover exceeds £90,000 in any rolling 12-month period for 2026/27 -- this is not a fixed tax-year window but a continuously rolling test, meaning you need to check your turnover for the trailing 12 months at the end of every month, not just once a year. If your turnover crosses £90,000 in any such 12-month period, you must register within 30 days of the end of the month in which you crossed the threshold, and VAT becomes chargeable from the first day of the second month after you exceeded it. You can also register voluntarily below the threshold, which some businesses do to reclaim VAT on purchases and appear more established to VAT-registered clients, though this means you must then charge VAT on your own sales too, which can make you less competitive against non-VAT-registered rivals if your customers are mostly individuals who cannot reclaim VAT themselves. If you expect your turnover to exceed £90,000 in the next 30 days alone (rather than gradually over 12 months), you must also register immediately, with VAT due from the date you realised this, not from when the threshold was actually crossed. Once registered, you must charge VAT (usually at the 20% standard rate) on relevant sales, submit regular VAT returns (typically quarterly) and can reclaim VAT paid on most business purchases and expenses, though certain items such as business entertainment are excluded from reclaim.

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