When you need to register for VAT

If you start a business and your turnover reaches a certain level, you may need to register for VAT.

When you need to register for VAT

You will need to register for VAT if:

  • Your estimated VAT taxable turnover is more than £85,000 (this is called the VAT threshold) a year.
  • You receive goods worth over £85,000 from the EU.
  • You expect to go over the VAT threshold in a 30 day period.

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

You can also choose to register for VAT if your turnover is below £85,000.

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 £85,000 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.

Working out how much VAT to charge

Once you have registered for VAT you will need to add VAT to all invoices that VAT applies to. You can work out how much VAT to charge using our free online VAT calculator.