What is the UK VAT registration threshold in 2025?

The VAT registration threshold for 2024/25 is £90,000. If your taxable turnover exceeds this amount in any rolling 12-month period, you must register for VAT with HMRC. Failure to register on time can result in penalties.

How is taxable turnover calculated?

Taxable turnover includes all sales of VAT-taxable goods and services at any rate — standard (20%), reduced (5%) or zero (0%). It does not include VAT-exempt supplies such as insurance, financial services or residential property sales.

How to register for VAT

You can register for VAT online through your HMRC Government Gateway account. The process typically takes 30 minutes and you will receive your VAT registration number within 10 working days. You can also appoint an accountant or tax agent to register on your behalf.

Should you register voluntarily?

Voluntary VAT registration makes sense if:

  • Most of your clients are VAT-registered businesses who can reclaim the VAT you charge
  • You have significant VAT costs on business purchases you want to reclaim
  • You want to appear more established and professional

It is less beneficial if you mainly sell to consumers (B2C), as adding VAT increases your prices without any reclaim benefit for your customers.

What to do after registering

Once registered, you must:

  • Charge VAT on all taxable sales at the correct rate
  • Issue VAT invoices to VAT-registered customers
  • Submit VAT returns (usually quarterly) via Making Tax Digital (MTD) compatible software
  • Pay any VAT owed to HMRC by the deadline
  • Keep VAT records for at least 6 years

The Flat Rate Scheme

If your taxable turnover is under £150,000, you may be eligible for HMRC’s Flat Rate Scheme. Instead of calculating VAT on each transaction, you pay a fixed percentage of your gross turnover. This can simplify your bookkeeping and sometimes result in keeping a small profit on the VAT you collect.

Track your VAT with invly

invly Premium includes a VAT summary dashboard that tracks exactly how much VAT you have collected and helps you monitor your turnover against the registration threshold. Try invly free today.