VAT, which stands for Value Added Tax, is tax paid on the consumption of goods and services. Businesses pay VAT when they buy goods and supplies, and also charge VAT to customers on products they sell.
A business starts paying VAT once it reaches the VAT threshold set by HMRC. To register for VAT, you’ll need to supply certain information – which can differ depending on your business’s legal structure.
So if you’re wondering what the VAT threshold is and how to become VAT-registered, keep reading to learn about:
Who needs to register for VAT?
You need to register to pay VAT if you:
- meet the VAT threshold (which we’ll go over in more detail below)
- are based outside the UK
- or have a business based outside the UK
- you’re based in Northern Ireland (NI), but sell or receive goods from the EU
- supply goods or services to the UK (or expect to in the next 30 days)
- take over a VAT registered business
You can also voluntarily choose to register for VAT, even if you don’t yet meet the threshold. This is called voluntary registration.
You don’t have to register for VAT if your taxable goods and services have a VAT rate of zero per cent – but you’ll still need to ask HMRC permission for this exemption.
What is the VAT threshold?
The VAT threshold for 2025 is £90,000 (up from £85,000). The government announced this increase in last year’s Spring Budget, with the new threshold coming in from 1 April 2024.
The VAT registration threshold is set by HMRC every year – but it remained unchanged from 2017-18 until increasing in 2024-25.
In the UK, you must register for VAT if your business’s annual taxable turnover goes over this threshold (or you know that it will).
Read more about registering for VAT.
| Business type | Threshold |
| UK businesses | £90,000 |
| Non-UK businesses | £0 |
| Distance selling into NI and EU | €10,000 |
| Bringing goods into NI from the EU | £90,000 |
If you want to deregister for VAT, then your turnover will need to be less than £88,000.
Should I be registered for VAT as a sole trader?
If you’re a sole trader and your annual turnover is over the £90,000 threshold, then you’ll need to register your self-employed business for VAT. The VAT threshold applies regardless of your business structure.
Information you’ll need to register for VAT
When registering for VAT, you’ll need to provide different information depending on your business structure.
If you’re a limited company | If you’re an individual or partnership |
|---|---|
Company name | Date of birth |
Turnover and nature of business | National Insurance number |
Bank account details | ID (passport/driving licence) |
Company registration number | Turnover and nature of business |
Unique Tax Reference (UTR) number | Bank account details |
Corporation tax | Unique Tax Reference (UTR) number (if you have one) |
Self Assessment | Paylisps |
Self Assessment return |
Different options for registering for VAT
You can apply for VAT registration either online or by post. Whether you’re self-employed or a limited company, these are the steps on how to become VAT registered:
How to register for VAT online
The easiest way is to register online, using your business tax account. Register for VAT online at the UK government’s VAT registration hub.
An agent (for example, an accountant or tax adviser) can also register your business and deal with HMRC for you.
You’ll then receive a VAT certificate from HMRC in the post, within 30 days of registration.
How to register for VAT by post
Some businesses can’t register online and will need to download a VAT1 form and send it by post. This can include businesses that are:
- applying for a registration exemption
- joining the Agricultural Flat Rate Scheme
- using separate VAT numbers to register different parts of the business
You might need to complete an additional form, depending on your business – visit the government’s how to register page for guidance on which one applies.
What is a VAT certificate?
You must have a VAT certificate in order to charge VAT on sales and show VAT on your invoices.
The certificate will show your:
- VAT number
- first VAT return (and payment) details
- effective date of VAT registration
You’ll get a VAT registration certificate from HMRC as part of the process of registering for VAT. It’s important to make sure you keep information on your VAT certificate up to date, including your address and turnover. Just as you would with your business insurance.
When will I get a VAT registration certificate?
It can take up to 30 days to process VAT registrations and to send your VAT certificate, according to the UK government website.
How to get a VAT number
You’ll get a VAT number as part of the VAT registration process. Once you’ve registered online or by post, you’ll be sent a certificate showing your VAT number. This is the number you’ll include on invoices and can put on your business website.
When to register for VAT
VAT registration becomes compulsory when:
- you expect your VAT taxable turnover to go over the threshold in the next 30-day period
- your business had a VAT taxable turnover exceeding the threshold over the last 12 months
How long does it take to register for VAT?
Registering for VAT in the UK typically takes around 30-40 days. However, this can take longer if it’s a busy period for HMRC.
There can also be delays on your end – which will depend on your record keeping. Take another look at the information you’ll need to apply for VAT that we listed above and make sure you’ve got everything ready.
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Deregistering or cancelling your VAT registration
VAT deregistration threshold 2025
Sometimes it might be beneficial for your business to deregister for VAT if your turnover is under the threshold. All you have to do is show HMRC that your taxable turnover will be less than the £88,000 deregistration threshold (previously £83,000).
Deregistration isn’t compulsory though, and businesses can continue being VAT registered even if their turnover is less than £90,000.
For businesses in Northern Ireland, the degregistration threshold for 2025 is £90,000.
How can I cancel my VAT registration?
In some situations, you must cancel your VAT registration by a certain date. For example, you’ve stopped trading or making VAT taxable supplies.
You can cancel VAT registration online.
How can I transfer my VAT registration?
You might want to transfer a VAT registration from one business to another, or if the status of your business changes (for example from partnership to sole trader).
Visit the government’s page on how to transfer a VAT registration to understand the process from start to finish.
How can I change my VAT address (or other details)?
Visit the government’s changes to your details page to edit your address, name, accountant information, bank details, or anything else connected with your VAT registration.
You should also use this page if taking on responsibilities for someone who has died or is ill.
Tax is a complex topic so be sure to speak to a professional if you’re not sure of anything.
How to register for VAT: FAQs
How do I register for VAT if I am taking over a business?
If you’re taking over a business, check its VAT registration status as early as you can. You may need to register for VAT, even if it’s already registered.
Do I need to register for VAT if my business is outside of the UK?
Thresholds don’t apply to businesses outside the UK. You’ll need to register as soon as you supply goods and services to the UK, or if you expect to in the next 30 days.
Do I need to register for VAT if my business is only temporarily over the VAT threshold?
If you know you’re only going to breach the threshold temporarily, you can apply for an exception.
You’ll need to show evidence why you believe your VAT taxable turnover won’t exceed the deregistration threshold of £88,000 in the next 12 months (or €90,000 for businesses registered in Northern Ireland).
Can I register for VAT if my turnover is below the threshold?
You don’t have to exceed the VAT threshold in order to register for VAT – it’s possible to register voluntarily.
But why might you consider doing this? Registering for VAT lets you reclaim VAT on items you buy for your business. If you pay more VAT than you collect from customers, reclaiming VAT makes up the difference.
It also means you’re ready for growth because you won’t need to keep an eye on your turnover.
On the other hand, VAT registration means more paperwork, and sometimes you’ll pay more to HMRC (if you collect more VAT from customers than you pay out). It’s best to look at the specifics of your business when deciding whether to register for VAT.
What happens if I register my VAT late?
If you register late, you’ll need to pay the VAT owed from the date you should have registered. You may also get a penalty.
It’s important to stay on top of your accounting so you know if you’re going to go over the threshold. If you do realise that you’ve already exceeded the VAT threshold then it’s important to notify HMRC as soon as possible. You’ll need to work out the date when your taxable turnover went over £90,000.
Accounting and tax guides for VAT registered businesses
Did you know business insurance is tax deductible?
Business insurance (such as public liability insurance) is an allowable expense you can claim while filing your tax return – while also helping to protect your small business. Why not get a tailored quote for business insurance today and start the new tax year off right?