VAT Threshold

The annual turnover level at which a UK business must register for VAT, currently £90,000. Businesses below this can register voluntarily.

Exceeding the VAT threshold without registering is illegal and results in backdated VAT liabilities plus penalties. Monitoring your turnover against this threshold is essential.

A freelancer notices her rolling 12-month turnover is approaching £85,000. She monitors it weekly and registers for VAT with HMRC before crossing £90,000.