What is the VAT threshold in 2026?
The VAT threshold is £90,000. It has applied since 1 April 2024 and is unchanged for 1 April 2026 to 31 March 2027. HMRC publishes it in the supplement to VAT Notice 700/1.
When do I need to register for VAT?
You must register when, at the end of any month, your taxable turnover for the previous 12 months is over £90,000. Tell HMRC within 30 days of the end of that month. You are registered from the first day of the second month after you went over. You must also register straight away if you expect taxable turnover in the next 30 days alone to be over £90,000.
| Test | You must tell HMRC | You are registered from |
|---|---|---|
| Last 12 months over £90,000 | Within 30 days of the end of the month you went over | The first day of the second month after |
| Next 30 days alone over £90,000 | Within 30 days of the date you first expected it | The date you first expected it |
Rolling 12-month taxable turnover, checked at the end of each month
- 31 AugustRolling total goes over £90,000
- 30 SeptemberDeadline to apply
- 1 OctoberYou are registered from
Worked examples from HMRC
- Your rolling 12-month total goes over £90,000 on 31 August. Apply by 30 September. You are registered from 1 October.
- On 20 January you realise the next 30 days alone will take you over £90,000. Apply by 18 February. You are registered from 20 January.
Is the threshold based on a calendar year or tax year?
Neither. It is a rolling 12-month period that you check at the end of every month. A business with a quiet first half-year and a busy second half can go over it mid-year, whatever its financial year says.
What counts towards the VAT threshold?
Your taxable turnover counts: the value of all your UK sales that are not exempt from VAT. That includes standard-rated (20%), reduced-rated (5%) and zero-rated (0%) sales. It does not include VAT-exempt sales, such as insurance or most residential lettings, or sales of capital assets like equipment or vehicles.
Does zero-rated turnover count towards the VAT threshold?
Yes. Zero-rated sales are taxable supplies at 0%, so they count towards the £90,000. If all or most of your sales are zero-rated, you can ask HMRC for exemption from registration instead.
Can I go over the VAT threshold temporarily?
Yes, if you can show HMRC that your taxable turnover in the next 12 months will not go over the £88,000 deregistration threshold. This is called exception from registration. You have to apply for it; it is not automatic. If HMRC refuses, you are registered from the date you should have been.
What is the VAT deregistration threshold?
The deregistration threshold is £88,000. You can ask to cancel your registration if you can satisfy HMRC that taxable turnover in the next 12 months will be £88,000 or less. Overseas businesses can only deregister if they stop making UK taxable supplies altogether.
How has the VAT threshold changed?
| Period | Registration threshold | Deregistration threshold |
|---|---|---|
| From 1 April 2024 | £90,000 | £88,000 |
| 1 April 2017 to 31 March 2024 | £85,000 | £83,000 |
| 1 April 2016 to 31 March 2017 | £83,000 | £81,000 |
| 1 April 2015 to 31 March 2016 | £82,000 | £80,000 |
| 1 April 2014 to 31 March 2015 | £81,000 | £79,000 |
Common scenarios
“My turnover will go over £90,000 because of one large contract.”
If the contract alone will take you over £90,000 in the next 30 days, you must register now under the forward-look test, from the date you knew. HMRC’s own example is a £100,000 contract arranged on 1 May: apply by 30 May, registered from 1 May.
“I went over by £3,000 in a seasonal peak.”
If the next 12 months will be £88,000 or less, apply for exception with evidence, such as forecasts or lost contracts. Keep checking every month, because the exception doesn’t stop you going over again.
“I sell mostly children’s clothing.”
Children’s clothing is zero-rated, so it counts towards the threshold. Once you go over, you can apply for exemption from registration, but you would then be unable to reclaim VAT on your costs.
Close to £90,000? Let’s check your numbers.
We work out your rolling total, your deadline and your registration date, then register you before it becomes a penalty.
Frequently asked questions
What happens if I go over £90,000 and don’t register?
HMRC registers you from the date you should have been registered, and you owe VAT on your sales from then. You may also be charged a penalty. See late registration penalties.
Is the VAT threshold based on profit or turnover?
Turnover. You compare your total taxable sales, before deducting any costs, with £90,000. A business with £95,000 of taxable sales and £40,000 of costs is over the threshold.
Do overseas businesses get the £90,000 threshold?
No. Businesses with no UK establishment have no threshold and must register from their first UK taxable sale. See UK VAT for overseas businesses.
Can I register for VAT below the threshold?
Yes. Any business making, or intending to make, taxable supplies can register voluntarily and choose its registration date. See voluntary registration.
Do I include sales to customers outside the UK?
Exports of goods are zero-rated and count as taxable turnover. Many services to overseas business customers are outside the scope of UK VAT and don’t count. Check the place-of-supply rules in VAT Notice 741A for each type of service.
Related guides
Sources
- HMRC VAT Notice 700/1, sections 3.3 to 3.7 and 4.2 to 4.4
- VAT Notice 700/1: supplement (registration and deregistration limits) — updated 5 August 2026
- GOV.UK: Register for VAT
General information based on HMRC guidance as at 27 September 2026, not advice for your situation. Rules change and depend on your facts. Talk to us before acting.