VAT Registration Threshold Calculator 2025/26 — Do I Need to Register?

How to use this calculator

1. 1 Enter your net taxable sales for each of the last 12 months. These are your sales figures before VAT, covering standard-rated, reduced-rate, and zero-rated supplies. Leave out any VAT-exempt income.
2. 2 Watch the rolling 12-month total update as you type. The status badge turns amber when you approach £80,000 and red when you exceed £90,000, so you can see at a glance how close you are to the registration threshold.
3. 3 Tick "I am already VAT registered" if you want to check the deregistration threshold instead. This switches the calculator to compare your turnover against the £88,000 deregistration limit rather than the £90,000 registration threshold.

How the VAT registration threshold works

The VAT registration threshold in the UK is £90,000. What catches many business owners out is that the threshold does not reset every April with the tax year. Instead, HMRC measures your sales on a rolling 12-month basis, meaning the clock is always ticking. At the end of every month, you add up all your taxable sales from the previous 12 months. If that total exceeds £90,000, you have crossed the threshold and need to register for VAT.

In practice, this means a business could be well under £90,000 for the whole of the previous tax year but still be required to register. If sales pick up sharply over a run of months, the rolling 12-month total can tip over the line mid-year without any single month looking especially large. The threshold is not about what you earn in a calendar year or a tax year. It is about what you have earned in any 12-month period ending right now.

There are two tests HMRC uses. The backward-looking test asks: have my total taxable sales over the last 12 months exceeded £90,000? If yes, you must register. A separate forward-looking test asks a different question: do I reasonably expect my taxable sales in the next 30 days alone to exceed £90,000? If you land a large contract that would push you over the limit within the next month, you must register immediately, even if your sales so far have been modest.

Formula

Rolling total = sum of all taxable sales
               in the most recent 12 calendar months

Must register if:  rolling total ≥ £90,000
May deregister if: expected next-12-month total < £88,000

Forward test:      register immediately if you expect
                   to earn > £90,000 in the next 30 days

Worked example

Frequently asked questions

What is the VAT registration threshold for 2025/26?

The VAT registration threshold for 2025/26 is £90,000. This applies to your taxable turnover over any rolling 12-month period. If your taxable sales exceed this figure, you must register for VAT. The threshold was increased from £85,000 to £90,000 in April 2024. HMRC reviews the threshold periodically, so check the current figure on gov.uk each tax year. The deregistration threshold — the figure at which you can ask to come off the VAT register — sits at £88,000.

What is the difference between the registration and deregistration threshold?

The registration threshold is the level of taxable turnover at which you must register: £90,000. The deregistration threshold is lower, at £88,000, and applies when you are already registered. If your taxable turnover drops below £88,000 and you expect it to stay there, you can ask HMRC to deregister you. The two figures are deliberately different to prevent businesses from bouncing on and off the register as their sales fluctuate around the same level. You cannot deregister the moment your sales dip below £90,000.

Do I count zero-rated sales towards the VAT threshold?

Yes, you do. Zero-rated sales are taxable supplies charged at a rate of 0%, and they count in full towards your £90,000 threshold. Common examples include most food, books, children's clothing, and public transport. The only sales you exclude from the threshold calculation are VAT-exempt supplies, such as certain financial services, insurance, and residential property rental. If your business mixes zero-rated and exempt income, only the exempt portion is left out of your rolling 12-month total.

What happens if I exceed the threshold and do not register?

If you exceed the threshold and fail to register, HMRC will issue a late registration penalty. The penalty is calculated as a percentage of the VAT you should have collected: 5% for up to 9 months late, 10% for 9–18 months, and 15% for over 18 months. The minimum penalty is £50. You also become liable for the VAT on all sales made since you should have registered — even if you did not charge your customers any VAT at the time. Collecting that money back from customers is rarely straightforward.

When do I have to register for VAT after exceeding the threshold?

You must notify HMRC within 30 days of the end of the month in which you crossed the threshold. So if your rolling 12-month total exceeds £90,000 at the end of October, you have until 30 November to register. HMRC will then register you from 1 December. For the forward-looking test, the rules are stricter: if you expect to exceed £90,000 in the next 30 days alone, you must notify HMRC immediately, and registration takes effect from the start of that 30-day period.

Can I register for VAT voluntarily before reaching the threshold?

Yes. Any business making taxable supplies can register for VAT voluntarily, even if sales are well below £90,000. Voluntary registration can make sense if you sell mainly to other VAT-registered businesses, because you can then reclaim VAT on your purchases. It can also make your business look more established. The downside is the administrative burden of completing quarterly VAT returns and the fact that your prices may appear higher to non-VAT-registered customers — such as consumers — who cannot reclaim the VAT you charge.

What is the 30-day forward-looking rule for VAT registration?

The forward-looking test requires you to register immediately if you have reasonable grounds to believe that your taxable sales in the next 30 days alone will exceed £90,000. Unlike the backward-looking test, which gives you 30 days after month-end to notify HMRC, the forward-looking test triggers an immediate registration requirement. It typically applies when a business lands a single large contract. If you sign a deal worth £100,000 to be invoiced within the next month, you need to register straight away.

How do I calculate my rolling 12-month turnover?

Add up all your taxable sales — including zero-rated sales but excluding VAT-exempt income — from the past 12 months, ending on the last day of the current month. This gives you your rolling 12-month total. Next month, drop the oldest month from your calculation, add the new month's sales, and recalculate. You repeat this process every month. The VAT registration threshold calculator on this page does the arithmetic for you: enter your monthly figures and it tracks the rolling total automatically, highlighting the month when you cross or approach the £90,000 threshold.

Common mistakes

• Thinking the threshold resets each April. This is one of the most widespread misunderstandings about VAT registration. The £90,000 limit has nothing to do with the tax year. HMRC looks at any rolling 12-month period ending on the last day of the current month. A business that had quiet sales in the first half of the year and a strong second half could cross the threshold in autumn, well before April comes around.
• Not counting zero-rated sales. Zero-rated does not mean outside the VAT system. It means the sale is taxable but the rate happens to be 0%. Common zero-rated goods include most food, children's clothing, and books. If you sell these, every pound of sales still counts towards your £90,000 total. Many small business owners wrongly assume that because they charge no VAT, their sales do not register for threshold purposes. They do.
• Missing the 30-day forward-looking test. Most people know about the backward-looking test, but the forward-looking test catches businesses off guard. If at any point you expect your taxable sales in the next 30 days alone to exceed £90,000, you must register immediately, regardless of what your last 12 months looked like. A single large contract could trigger this. You do not get the usual 30-day notification window in this case.
• Registering late and facing a penalty. Once you cross the threshold, you have 30 days to tell HMRC. Miss that deadline and HMRC will issue a late registration penalty based on the amount of VAT you should have been charging. The longer you delay, the larger the penalty. HMRC takes late registration seriously, and ignorance of the rules is not treated as a reasonable excuse. Once you are registered, the VAT Flat Rate Scheme Calculator can help you decide whether simplified VAT accounting would suit your business.
• Confusing turnover with profit. The VAT threshold is based on your total sales income, not what you keep after costs. A builder who earns £100,000 in fees but spends £60,000 on materials has a turnover of £100,000 for threshold purposes, not £40,000. Many sole traders running tight margins discover too late that their sales have crossed £90,000 even though they feel like they have barely made any money.

VAT rules and HMRC guidance

The definitive reference for UK VAT registration rules is HMRC VAT Notice 700/1: Should I be registered for VAT?, available at gov.uk/government/publications/vat-notice-7001-should-i-be-registered-for-vat. This notice covers both the backward-looking and forward-looking registration tests in full, explains what counts as taxable turnover, and sets out the notification deadlines. If you are unsure whether a particular type of income counts towards the threshold, this is the place to check. HMRC also maintains a general VAT registration guide at gov.uk/vat-registration.

Late registration penalties are set out in Schedule 41 of the Finance Act 2008. HMRC calculates the penalty as a percentage of the VAT due during the period of non-registration, ranging from 0% to 30% depending on whether the failure was prompted or unprompted and whether you showed reasonable care. In serious cases of deliberate non-registration, penalties can reach 100% of the VAT you owe. If you think you may have missed the registration deadline, register immediately and contact HMRC before they contact you. Voluntary disclosure typically results in a lower penalty.