VAT registration threshold 2026: the rolling £90,000 check

Guidance checked on 14 September 2026

A busy month is good news, but it can bring a VAT registration obligation earlier than you expect. For UK businesses, the main threshold is currently £90,000 of VAT-taxable turnover. The crucial point is how you measure it: the usual check looks at the previous 12 months, moving forward every month, rather than your accounting year or the tax year.

There is also a separate test when you expect taxable turnover to exceed £90,000 in the next 30 days alone. A large new contract can therefore require attention even if your business has only recently started.

This guide explains both checks and a practical routine for sole traders and limited companies in Bromley, London and across the UK. It focuses on businesses established in the UK; overseas businesses and some specialist transactions have different rules.

What is the VAT registration threshold in 2026?

The compulsory registration threshold is more than £90,000 of taxable turnover. Exactly £90,000 does not exceed it. HMRC's VAT thresholds page confirms the current amount.

Turnover means sales and supplies relevant to the test, before deducting business expenses. It is not your profit, personal drawings or the balance in your bank account. Buying equipment or paying a large supplier bill does not, by itself, reduce the sales figure used for registration.

For a sole trader, check all taxable business activities carried on by the same person. Do not give each trading name a separate threshold. A limited company needs to monitor its own position. Changes of business structure, takeovers and connected businesses need individual consideration.

Which sales count towards taxable turnover?

Standard-rated, reduced-rated and zero-rated supplies can all count. Zero-rated is different from exempt: a sale taxed at 0% remains a taxable supply. Exempt supplies and supplies outside the scope of UK VAT are generally excluded.

Classify what you sell before adding up the figures. Do not decide solely from whether you currently show VAT on an invoice. An unregistered business can still make taxable supplies. HMRC explains the definitions and registration calculation in VAT Notice 700/1.

Sales of capital assets are normally excluded from this registration calculation, but there are exceptions, including certain opted-to-tax property sales. Reverse-charge transactions, overseas services and unusual supplies also deserve a specific check. Flag these in your records rather than assuming every amount paid into the business bank account belongs in the same total.

How the rolling 12-month VAT check works

At the end of each month, add the taxable turnover for that month and the preceding 11 months. In the following month, remove the oldest month and add the newest. If you have traded for less than a year, use the period you have actually traded; you do not receive a 12-month waiting period.

For example, at 31 August 2026 the 12-month window is 1 September 2025 to 31 August 2026. At 30 September it becomes 1 October 2025 to 30 September 2026. Your company year end does not reset that calculation.

A useful tracker has columns for month, taxable turnover, the rolling total, the remaining amount before £90,000, and the action taken. Keep notes explaining adjustments and unusual transactions. Link each monthly figure back to the underlying bookkeeping so you can explain it later.

A simple formula is: previous rolling total, less the oldest month's turnover, plus the newest month's turnover. Check the dates as carefully as the arithmetic. A spreadsheet that accidentally includes 13 months can be as misleading as one that misses a month.

A worked example: growing sales in August

Consider an illustrative business with a rolling total of £87,000 at 31 July 2026. Its August 2025 taxable turnover was £5,000, and its August 2026 taxable turnover is £10,000.

The updated calculation is £87,000 minus £5,000 plus £10,000: £92,000. The business has crossed the threshold at the August month-end check. Assume this is its first breach and the separate forward-looking test has not already applied.

Under the normal backward-looking rule, it must notify HMRC within 30 days after the end of August: by 30 September 2026. Its effective registration date is 1 October 2026. HMRC's registration guidance explains the deadline and effective-date rules.

Record both dates. The application deadline tells you when to act; the effective date determines when VAT accounting begins. Treating them as interchangeable can cause invoicing mistakes.

The separate next-30-days test

The forward-looking test asks whether taxable supplies in the next 30 days alone will exceed £90,000. It does not simply ask whether a modest upcoming sale will push your rolling annual total over £90,000.

Suppose a new consultancy expects to make £100,000 of taxable supplies during the next 30 days. That calls for an immediate registration review even if its previous sales were small. A contract of the same value spread over a much longer period needs a different analysis of the supplies and their timing.

When this test applies, the effective registration date is when you realise the threshold will be exceeded in that 30-day period. The application deadline is the end of that period. Keep the evidence behind the expectation, such as the contract and delivery schedule, and check the dates promptly.

Build a monthly routine that catches changes early

Choose a regular month-end review and make one person responsible for it. That might be you, your bookkeeper or your accountant, but agree who raises an alert and who acts on it.

• Bring sales records up to date and identify missing invoices or cash sales.

• Separate taxable supplies from exempt or out-of-scope items using a consistent classification.

• Reconcile the figures to the bookkeeping and investigate differences.

• Update the rolling total and record whether registration needs action.

• Review new contracts and significant orders for the separate 30-day test.

A bank feed is useful evidence, but it is not automatically a complete VAT turnover calculation. Loans, capital introduced and transfers are not the same thing as sales. Equally, timing questions can arise around deposits and staged work. HMRC's guidance on instalments and deposits explains why payment and supply arrangements matter.

Plan your pricing before the effective date

Registration can change the economics of an agreed price. Review quotations, contracts and customer communications before assuming you can add VAT on top of every existing amount.

As a simplified example, assume a service is standard-rated at 20%. A £1,000 price excluding VAT becomes £1,200 including VAT. If the final customer price instead remains £1,000 including VAT, the amount excluding VAT is £833.33 and the VAT element is £166.67, rounded to pennies. HMRC explains these calculations in its VAT charging guidance.

That comparison is not a complete profit calculation: eligible input VAT and other costs also matter. It does show why customer type and contract terms deserve attention. A customer who cannot recover VAT may experience a price increase differently from one who can.

Prepare a cash-flow plan as well. Money received from customers can include VAT that will need to be accounted for, so avoid treating the whole receipt as available profit.

Registration, invoices and your first return

Gather the information HMRC requests for your business type, including turnover figures, forecasts and relevant tax and business identifiers. Use the official registration guide to check the requirements.

If you are waiting for a VAT number, you cannot show VAT separately on invoices until you receive it. However, VAT may still be due from your effective registration date. HMRC explains how prices and replacement invoices can be handled while you wait; agree the approach before issuing documents to customers.

After registration, confirm your effective date and first return period. VAT returns are usually quarterly, and the online filing and payment deadline is normally one calendar month and seven days after the period ends. Check your actual dates in the VAT account, following the VAT return guidance.

VAT-registered businesses generally need digital records and compatible software unless exempt. HMRC's record-keeping guidance explains the requirements. A turnover tracker helps you monitor registration, but does not by itself replace your VAT records and return process.

Common questions about crossing the threshold

What if the increase is temporary?

You can ask HMRC for a registration exception where the relevant conditions are met. It is not automatic: HMRC must consider the application. Prepare evidence for the expected fall in turnover and follow the official process rather than deciding privately that a busy month does not count.

What if I should already have registered?

Reconstruct the monthly figures and establish the correct effective date. Late registration can mean VAT is due from when registration should have started, with a possible penalty. Act promptly, retain supporting records and get help with the calculation and application.

Can I register below £90,000?

Voluntary registration is possible for eligible businesses. Consider customers, recoverable input VAT, administration and the effect on prices before choosing it. Being below the threshold does not automatically make registration beneficial or unsuitable.

Get your VAT position organised

Start with your latest monthly sales figures, your current rolling total and details of any substantial new contracts. Those three items provide a useful starting point for a focused conversation.

mysimplytax.com supports businesses in Bromley, London and across the UK with bookkeeping and accountancy, including VAT support. Explore our limited company accounting services or contact the team to discuss your turnover checks, registration and ongoing records.