Answers · UK 2025/26
What are the benefits of voluntary VAT registration in the UK?
Voluntary VAT registration (below the £90,000 threshold) allows you to reclaim VAT on purchases but requires you to charge 20% VAT on your sales.
Full answer
Registering for VAT voluntarily before reaching the £90,000 mandatory threshold can be beneficial if your customers are mainly VAT-registered businesses (who can reclaim the VAT you charge) and you have significant VAT costs on your purchases. You can also backdate voluntary registration to reclaim input VAT on goods purchased up to 4 years before registration (and 6 months for services). However, if you serve mainly consumers or unregistered businesses, adding 20% VAT to your prices may price you out of the market unless you absorb the cost. Some businesses register voluntarily to appear larger and more credible to corporate clients.
This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.