You must register when you go over the threshold, or know that you will. The threshold is based on your VAT taxable turnover - the total of everything sold that isn’t VAT exempt.
You must register for VAT if:
- your VAT taxable turnover is more than £85,000 (the ‘threshold’) in a 12 month period
- you expect to go over the threshold in a single 30 day period
You’ll also need to register if you only sell goods or services that are exempt from VAT or ‘out of scope’ but you buy goods for more than £85,000 from EU VAT-registered suppliers to use in your business.
You may have to register for VAT if you take over a business that’s already registered.
Businesses outside the UK
There’s no threshold if neither you nor your business is based in the UK. You must register as soon as you supply any goods and services to the UK (or if you expect to in the next 30 days).
You must register within 30 days of your business turnover exceeding the threshold. If you register late, you must pay what you owe from when you should have registered.
You may get a penalty depending on how much you owe and how late your registration is.
You can register voluntarily if your business turnover is below £85,000. You must pay HMRC any VAT you owe from the date they register you.
Get an exception
You can apply for a registration ‘exception’ if your taxable turnover goes over the threshold temporarily.
Write to HMRC with evidence showing why you believe your VAT taxable turnover won’t go over the de-registration threshold of £83,000 in the next 12 months.
HMRC will consider your exception and write confirming if you get one. If not, they’ll register you for VAT.