The VAT registration threshold is £90,000 of taxable turnover for 2026/27. You must register if your taxable turnover over any rolling 12-month period goes above £90,000, or if you expect it to go above £90,000 in the next 30 days on its own. You then have 30 days to register, and you must start charging VAT from your effective date of registration. The deregistration threshold is £88,000.
Many Bolton sole traders and small companies only check their turnover once a year, which is how late registrations and unexpected VAT bills happen. This guide explains the two tests, what counts as taxable turnover, the deadlines, voluntary registration and a worked example.
Table of Contents
VAT registration threshold for 2026/27
| Threshold | Amount |
|---|---|
| Compulsory VAT registration | £90,000 taxable turnover |
| Deregistration | £88,000 taxable turnover |
| Overseas businesses making UK supplies | No threshold: register from the first supply |
The £90,000 VAT registration threshold has applied since 1 April 2024, and the October 2026 Budget left it unchanged. It applies to your total taxable turnover across all your business activities as a sole trader, not to each business separately.
The two tests for VAT registration
The rolling 12-month test
At the end of every month, add up your taxable turnover for the last 12 months. If the total is more than £90,000, you must register within 30 days of the end of that month. Your registration takes effect from the first day of the second month after you went over. This is not the tax year or your accounting year: it is any 12-month period, so you need to check it monthly.
The forward 30-day test
You must also register if you expect your taxable turnover in the next 30 days alone to be more than £90,000, for example because you have won a large contract. In this case you must register by the end of that 30-day period, and your registration takes effect from the date you realised you would go over.
What counts towards the VAT registration threshold
Taxable turnover is the total value of everything you sell that is not exempt from VAT. It includes:
- Standard-rated sales (20%)
- Reduced-rate sales (5%)
- Zero-rated sales (0%), such as most food and children’s clothing
- Goods you hire or loan to people, and business goods used for personal reasons
It does not include VAT-exempt sales, such as most residential rent, insurance and some financial services, or sales that are outside the scope of UK VAT. If you are unsure whether a sale is taxable, our guide to common VAT mistakes covers the areas that most often catch businesses out.
Worked example: a Bolton salon crossing the threshold
This is an illustrative example, not a real client. A self-employed hairdresser checks her rolling 12-month turnover at the end of each month.
| Month end | Turnover added this month | Turnover dropped (same month last year) | Rolling 12-month total |
|---|---|---|---|
| 30 September 2026 | £7,800 | £6,900 | £88,500 |
| 31 October 2026 | £9,000 | £6,500 | £91,000 |
Her rolling total goes over £90,000 at the end of October 2026. She must register for VAT by 30 November 2026, and her registration takes effect from 1 December 2026. From that date she must add VAT to her prices or absorb it. On a £50 haircut, absorbing the VAT means she keeps £41.67 and pays £8.33 to HMRC.
If she had registered late, for example in March 2027, she would still owe VAT on all her sales from 1 December 2026, even though she had not charged it to customers, plus a possible penalty. Our accountants for hairdressers help salon owners plan for this before they reach the threshold.
Voluntary VAT registration
You can register voluntarily below the VAT registration threshold. This can make sense if most of your customers are VAT-registered businesses that can reclaim the VAT you charge, or if you make zero-rated sales and want to reclaim VAT on your costs. It rarely helps businesses that sell mainly to the public, because your prices go up or your margin goes down.
After you register: schemes, returns and MTD
- Choose the right scheme: the Flat Rate, Cash Accounting or Annual Accounting schemes can simplify things. See VAT schemes compared and our Flat Rate Scheme glossary entry.
- Keep digital records and file VAT returns through Making Tax Digital compatible software, usually every quarter.
- Pay on time: see how to pay your VAT bill online.
- Use our VAT calculator to work out VAT-inclusive and VAT-exclusive prices.
What if you go over the VAT registration threshold temporarily?
If a one-off sale pushes you over £90,000 but you can show your turnover will fall back below £88,000 in the next 12 months, you can apply to HMRC for an exception from registration. HMRC must agree in writing; until it does, you should treat yourself as liable to register.
Frequently asked questions
What is the VAT registration threshold for 2026/27?
The VAT registration threshold is £90,000 of taxable turnover. The deregistration threshold is £88,000.
Is the VAT threshold based on profit or turnover?
Turnover. It is the total value of your taxable sales before any expenses, not your profit.
Is the VAT threshold based on the tax year?
No. You check your taxable turnover over any rolling 12-month period, usually at the end of each month.
How long do I have to register for VAT?
Under the rolling 12-month test you must register within 30 days of the end of the month in which you went over £90,000.
What happens if I register for VAT late?
You must pay VAT on all your taxable sales from the date you should have been registered, even if you did not charge it, and HMRC may charge a penalty.
Get help with VAT registration in Bolton
Cangaf’s ACCA-qualified team in Bolton monitors your turnover against the VAT registration threshold, registers your business, chooses the right scheme and files your VAT returns through Making Tax Digital. We work with sole traders, online sellers and limited companies. Call 01204 859315, email [email protected] or request a fixed-fee quote; the fee is agreed upfront.
Official guidance: when to register for VAT, how to register for VAT and cancel your VAT registration (GOV.UK).
