When to register for VAT as a freelancer

If you start a freelance business and your turnover reaches a certain amount, you may have to register for VAT.

When you need to register for VAT

  • Your estimated VAT taxable turnover is over £79,000 (known as the VAT threshold) a year.
  • You receive goods worth more than £79,000 from the EU.
  • You expect to go over the VAT threshold in a 30 day period.

It’s very important that you register for VAT when you need to. If you register late, HMRC might charge you a penalty of between 5-15% of the VAT you owe.

If you wish, you can also decide to register for VAT if your turnover is less than £79,000.

VAT exceptions

In some circumstances (for example if your turnover temporarily exceeds the VAT threshold) you can apply for an exception by writing to HMRC. You’ll need to explain why your VAT taxable turnover is under £75,000 and provide proof.

If HMRC accepts your exception they will write to let you know. If not, they will register you for VAT.

The address to write to is:

HM Revenue & Customs
VAT Registration Service
62-70 Tettenhall Road

Flat rate VAT

If your VAT turnover is less than £150,000 you can choose to join the flat rate VAT scheme instead.

If you use an accountant they can advise you if and when you need to register for VAT, and complete the registration for you.