There are so many taxes to think about and VAT is one of those that confuses a lot of business owners I speak to. The most common question, when do I need to register for VAT?

When do I need to register for VAT?

Note: the VAT turnover threshold increased from £85,000 to £90,000 on 1st April 2024

This is an important one as I have seen business owners be fined a lot for not registering for VAT when they were supposed to.

The magic number to remember is: £90,000.

When your business goes over the £90,000 threshold you need to register for VAT, it’s not a calendar year, or your accounting period it’s a rolling 12-month period, which you need to be constantly monitoring.

An easy way to do this in your accounting software is to select dates for the last year and look at your turnover figure.

When you breach the £85,000 threshold you then must register with-in 30 days after the month you went over the threshold.

For example, if you went over £85,000 to 31st August 2023, you would then need to register by 30th September 2023 with the date of registration being the first day of the second month after you went over the threshold so 1st October 2023.

A couple of things to bear in mind:

You also need to register if you think you will do more than £90,000 turnover in the next 30 days.

You can have a voluntary registration if you haven’t yet breached the turnover, this may be beneficial if a lot of your customers are VAT registered and you’re being charged VAT on your purchases.

Make sure you know what your turnover is for the last 12 months.

Here’s the HMRC guidance on when do register for VAT.

If you have VAT on your mind and you need more support from your accountant, drop me a message and we can have a chat.