The VAT Registration Threshold

You must register for VAT if your taxable turnover exceeds £90,000 in any rolling 12-month period (as of 2024/25). You can also register voluntarily below this threshold, which can be beneficial if your clients are VAT-registered businesses.

How to Register

  1. Create a Government Gateway account at gov.uk
  2. Complete the VAT registration form (VAT1) online
  3. You'll receive your VAT registration number within 30 working days
  4. You can get an exception to registration if your taxable turnover temporarily exceeded the threshold

Choosing a VAT Scheme

There are several VAT schemes available:

  • Standard VAT Accounting — pay VAT on invoices issued (not when paid)
  • Cash Accounting Scheme — pay VAT only when your customer pays you (better for cash flow, available under £1.35m turnover)
  • Flat Rate Scheme — pay a fixed percentage of your turnover instead of calculating VAT on each transaction (available under £150,000 turnover)
  • Annual Accounting Scheme — make advance payments and submit one return per year

What Changes on Your Invoices

Once VAT registered, your invoices must include:

  • Your VAT registration number
  • The VAT rate applied to each item
  • The VAT amount charged
  • The net (pre-VAT) and gross (post-VAT) totals

invly handles all of this automatically — just enter your VAT number in your profile and it appears on every invoice.