UK VAT Threshold Explained 2026/27

When you need to register for VAT in the UK, the current threshold, and what happens once you're registered.

Last reviewed: 12 July 2026

What is the VAT threshold?

The VAT registration threshold is the level of taxable turnover at which a business must register for VAT with HMRC. For 2026/27, the threshold is £90,000.

If your taxable turnover exceeds £90,000 in any rolling 12-month period, or you expect it to exceed £90,000 in the next 30 days alone, you must register for VAT.

When you need to register

You must register for VAT if:

Your taxable turnover in the last 12 months exceeded £90,000
You expect your taxable turnover to exceed £90,000 in the next 30 days

Voluntary registration

You can register voluntarily even if you're below the threshold. This can be useful if you want to reclaim input VAT on purchases or if your customers are VAT-registered businesses.

What counts as taxable turnover

Taxable turnover includes the total value of everything you sell that is not VAT-exempt. This includes goods and services at the standard rate (20%), reduced rate (5%), and zero rate (0%).

It does not include VAT-exempt sales, income from outside the UK (in most cases), or non-business income.

What happens after you register

Once registered, you must charge VAT on your taxable sales, submit VAT returns (usually quarterly), and pay any VAT owed to HMRC. You can also reclaim VAT on eligible business purchases.

Why business structure and activity matter

Your VAT obligations can vary depending on your business structure (sole trader, partnership, limited company) and the type of goods or services you sell. Some supplies are exempt, some are zero-rated, and some fall under special schemes like the Flat Rate Scheme.

If your business involves mixed supplies or you're unsure whether your turnover counts towards the threshold, it's worth checking HMRC's guidance or speaking to an accountant.