VAT Threshold Checker

The VAT threshold by year: 2025, 2026 and 2027 #

The VAT threshold 2025 figure, the VAT threshold 2026 figure and the VAT threshold 2027 figure are all the same number: £90,000.00. It has not moved since 1 April 2024, and nothing has been announced to change it.

That is worth stating plainly, because the reason people attach a year to the search is to find out whether it changed while they were not looking. It did not.

The £85,000.00 figure stood for seven years before the April 2024 rise, which is why so much older guidance still quotes it. If you are reading a page that says £85,000.00, it was written before April 2024 and you should assume everything else on it is the same vintage.

The VAT threshold budget 2025 announcement left it alone, as did the one before it. A VAT threshold budget change is the thing to watch for each year, since the threshold is set by the Chancellor rather than indexed to anything. It has been frozen far more often than it has risen, and freezing it while prices rise pulls more businesses over the line each year without any announcement being made.

Rolling 12 months, not your accounting year #

This is where businesses get caught. The test is not "did I turn over £90,000 in my financial year". It is: at the end of every month, add up the previous twelve months. The moment that figure passes £90,000.00, the duty to register begins.

A business with a March year end can cross the threshold in August and have no idea until the accounts are done the following summer, by which point it owes VAT on ten months of sales it never charged VAT on.

The two tests #

The forward look catches people out because the effective date is earlier than they expect. If you sign a contract on 3 June that will take you over within the month, you are registered from 3 June, not from the day the money arrives.

Your effective date can fall before your deadline #

The two dates are set by different rules and they do not move together. The deadline is 30 days from the month end. The effective date is the first day of the second month after you crossed. In a long month those cross over.

Cross the threshold in January and you are VAT registered from 1 March, but your deadline to tell HMRC is 2 March. You are required to charge VAT on sales for a day or two before the paperwork is even late. Invoices raised in that window still carry VAT, and you cannot go back to the customer for it afterwards.

What counts as taxable turnover #

Zero rated is the one that surprises people. A zero rated sale carries VAT at 0%, but it is still a taxable supply and it still counts towards the threshold.

Registering late is expensive #

If you should have registered in May and only do so in December, HMRC treats you as registered from May. You owe the VAT on everything sold since then, whether or not you charged it to your customers.

On seven months of sales at £8,000 a month, that is £56,000 of turnover carrying £9,333 of VAT you now have to find, plus penalties. Recovering it from customers after the fact is rarely possible.

Coming back down #

The deregistration threshold is £88,000.00. Once taxable turnover falls below it you can ask to cancel. HMRC usually confirms within 40 working days.

The £2,000.00 gap between the two thresholds is deliberate. It stops a business hovering around the limit from having to register and deregister repeatedly.

You must cancel within 30 days if you stop being eligible altogether, for instance if you stop trading or join a VAT group. That one is compulsory rather than optional.

Common questions #

What is the VAT registration threshold?

£90,000 of taxable turnover. You must register once your total taxable turnover for the previous 12 months goes over it, or if you expect to go over it within the next 30 days.

Is the VAT threshold based on my accounting year?

No, and this is the most common misunderstanding. It is a rolling 12 months. At the end of every month you total the previous 12 months, and the moment that figure passes £90,000 the duty to register starts. Your year end is irrelevant.

How long do I have to register for VAT?

Thirty days from the end of the month in which you went over. Registration then takes effect from the first day of the second month after you crossed, so exceeding the threshold in March means registering by the end of April with effect from 1 May.

What is the VAT deregistration threshold?

£88,000. You can ask to cancel your registration once taxable turnover falls below it. The £2,000 gap between the two thresholds exists so businesses hovering around the limit are not registering and deregistering repeatedly.

What happens if I register late?

You still owe the VAT on everything you sold from the date registration should have started, whether or not you charged it to your customers. That is why late registration is expensive rather than merely embarrassing.

More detail: how VAT registration works and which VAT rate applies to what.