Does the threshold reset each tax year?

No. The VAT threshold is based on a rolling 12-month period, not the tax year. You check your cumulative turnover at the end of each month.

What if I exceed it temporarily?

If your rolling 12-month turnover goes over the threshold, you must register, even if it's temporary. However, if you later drop below the deregistration threshold, you can apply to cancel.

Is exempt income included?

No. Exempt supplies are not included in taxable turnover. Only supplies subject to VAT (including zero-rated) count towards the threshold.

VAT registration threshold: when you must register

You must register for VAT when your taxable turnover over any rolling 12-month period exceeds the current threshold, or when you expect it to in the next 30 days. Check this monthly, not per tax year. Register online with HMRC within 30 days of exceeding.

The rolling 12-month test

VAT registration is based on a rolling 12-month test, not the tax year. This means you look back at your taxable turnover for the last 12 months at the end of each month. If that total goes over the current threshold, you must register. Because it's rolling, you need to check every month, even if your annual turnover was below the threshold at the start of the year.

The 30-day forward test

There's also a forward-looking test. If at any point you expect your taxable turnover to exceed the threshold in the next 30 days alone, you must register. This applies even if your rolling 12-month total is still below the threshold. For example, if you land a large one-off contract that will push you over, you need to act.

What counts as taxable turnover

Taxable turnover includes the value of all goods and services you supply that are subject to VAT, including zero-rated items. It does not include exempt supplies, such as some financial services or education. It also excludes any VAT you charge – it's the net value. You need to include all taxable sales, even if you haven't issued an invoice yet.

Registering and your effective date

Once you exceed the threshold, you must register within 30 days. Your effective date is the date you went over the threshold in the rolling test, or the date you realised you would exceed it in the 30-day test. You'll need to provide details about your business and your turnover. Registration is done online with HMRC. After registration, you'll receive a VAT registration number and must follow Making Tax Digital rules for your returns.

Voluntary registration

If your turnover is below the threshold, you can still choose to register voluntarily. This might be useful if you want to reclaim VAT on your purchases or if most of your customers are VAT-registered. Once registered, you must stay registered for at least 12 months. You can also use our VAT number checker to verify customers' details.

Deregistration threshold

If your taxable turnover drops below the deregistration threshold, you can apply to cancel your VAT registration. This is also a rolling 12-month test. You must apply within 30 days if you expect your turnover to stay below the threshold. Once deregistered, you stop charging VAT and can no longer reclaim it on purchases.