Do I need to register for VAT?

You must register for VAT if your taxable turnover goes over £90,000. That threshold has been £90,000 since 1 April 2024, when it rose from £85,000. GOV.UK still publishes £90,000.

Taxable turnover is the total of everything you sell that is not exempt from VAT and not outside the scope of VAT. Zero-rated sales count. So do reduced-rated and standard-rated sales. It is not your profit, and it is not the balance in the bank.

GOV.UK sets two points at which you must register. Either one is enough.

If you went over on the rolling 12-month test, you have to register within 30 days of the end of the month you went over. Your effective date of registration is the first day of the second month after you go over. GOV.UK's example: if the total first goes over on 15 July, you register by 30 August, and the effective date is 1 September.

If you realise you are going to go over in the next 30 days, you register by the end of that 30-day period. The effective date is the date you realised, not the date the money arrives. GOV.UK's example: on 1 May you arrange a £100,000 contract to be paid at the end of May. You register by 30 May, and the effective date is 1 May.

If you register late, you have to account for VAT from the date you should have been registered.

You can choose to register if your taxable turnover is under £90,000. That is voluntary registration. It can be worth it when your customers are VAT registered and can reclaim the VAT, or when you want to reclaim VAT on what you buy. It also means filing returns. I would talk that through before you do it. It is not something to switch on because a website suggested it.

If you are already registered and your taxable turnover falls below £88,000, you can ask HMRC to cancel the registration. You do not have to. £88,000 is the deregistration threshold GOV.UK publishes, and it has been that since 1 April 2024, when it rose from £83,000.

If you only sell goods or services that are exempt or outside the scope of VAT, you do not have to register. If you go over the threshold for a short spell, you can ask HMRC for an exception, and they write to say whether you have one. A business based outside the UK has its own rule. Those cases are on GOV.UK, and I would rather you read them there than take a shortened version from me.

Once you are registered, the return is filed from a reconciled ledger. I have written up how that work is done on the VAT page. Registration itself is discussed first. It is not part of the published monthly retainer. Making Tax Digital for VAT, which is the way a registered business files, is separate from Making Tax Digital for Income Tax.