# UK VAT threshold: when to register at £90,000

In the UK you must register for VAT once your taxable turnover passes £90,000. HMRC looks at any rolling 12 months, not the tax year, and also at the next 30 days on their own. The threshold rose from £85,000 on 1 April 2024. Below it you can still register by choice, and once registered you can cancel if turnover drops under £88,000.

## Who

Any UK business whose taxable turnover passed £90,000 in the last 12 months, or will pass it within the next 30 days, must register. Taxable turnover counts zero-rated and reduced-rated sales, not exempt ones. A business based outside the UK that supplies goods or services in the UK must register whatever its turnover.

## Dates

- 2024-04-01: The registration threshold rises from £85,000 to £90,000 and the deregistration threshold from £83,000 to £88,000.

## Tools

- Xero: yes. HMRC-recognised for MTD: builds the VAT return from your invoices and bills, on the accrual, cash or flat rate scheme. (https://www.xero.com/uk/accounting-software/submit-vat-online/, 2026-10-05)
- QuickBooks: yes. Its MTD software supports the standard, cash and flat rate VAT schemes and sends returns to HMRC. (https://quickbooks.intuit.com/uk/making-tax-digital/, 2026-10-05)
- FreeAgent: yes. Supports the flat rate scheme, works out the figures and fills in your VAT return ready to file online. (https://www.freeagent.com/guides/vat/flat-rate-scheme/, 2026-10-05)
- Sage Accounting: yes. Sage Accounting applies your flat rate percentage and leaves out the purchases you cannot reclaim when it builds the return. (https://gb-kb.sage.com/portal/app/portlets/results/viewsolution.jsp?solutionid=222001000100673, 2026-10-05)

## Questions

### How fast do I need to register after passing £90,000?

You have 30 days from the end of the month in which your rolling 12-month turnover went over £90,000. Your registration then takes effect on the first day of the second month after you went over. If you expect to pass £90,000 within the next 30 days alone, register by the end of that 30-day period. Registering late means you pay VAT on sales since the date you should have registered, and a penalty can follow.

### Is the £90,000 counted per tax year?

No. HMRC uses any rolling 12 months, so you check your total at the end of every month. A strong summer can push you over in September even if your April to March total stays lower. Exempt sales stay out of the count, but zero-rated sales go in.

### Can I stay unregistered if I go over only once?

You can apply for an exception if your turnover passes the threshold temporarily. HMRC looks at your case and tells you whether it accepts it. If it refuses, you are registered for VAT. You still have to apply within the normal deadline.

### When can I cancel my VAT registration?

You can ask to cancel once your taxable turnover falls below £88,000. The gap of £2,000 under the registration threshold stops you from switching in and out each year. If you stop being eligible, for example because you close the business, you must cancel within 30 days or risk a penalty. HMRC usually confirms within 40 working days.

### Does the flat rate scheme save me money?

It depends on your costs. You charge customers 20% as usual but pay HMRC a fixed percentage of your VAT-inclusive turnover, set by your trade, and you keep the difference. You cannot reclaim VAT on purchases, except capital assets over £2,000. If your goods cost less than 2% of turnover or £1,000 a year, you pay the limited cost rate of 16.5%, and in your first year as a VAT-registered business you get 1% off. You can join with turnover up to £150,000 before VAT and must leave above £230,000 including VAT.

## Sources

- [GOV.UK: Register for VAT](https://www.gov.uk/register-for-vat)
- [GOV.UK: Who should register for VAT](https://www.gov.uk/register-for-vat/who-should-register-for-vat)
- [GOV.UK: Cancel your VAT registration](https://www.gov.uk/register-for-vat/cancel-your-registration)
- [GOV.UK: VAT thresholds](https://www.gov.uk/how-vat-works/vat-thresholds)
- [GOV.UK: VAT: increasing the registration and deregistration thresholds](https://www.gov.uk/government/publications/vat-increasing-the-registration-and-deregistration-thresholds/increasing-the-vat-registration-threshold)
- [GOV.UK: VAT Flat Rate Scheme](https://www.gov.uk/vat-flat-rate-scheme)
- [GOV.UK: VAT Flat Rate Scheme, how much you pay](https://www.gov.uk/vat-flat-rate-scheme/how-much-you-pay)
- [GOV.UK: VAT Flat Rate Scheme, if your circumstances change](https://www.gov.uk/vat-flat-rate-scheme/if-your-circumstances-change)