Plan for VAT before the threshold surprises you

First decide whether VAT registration applies

VAT registration depends on taxable turnover, not profit and not the business structure. The current compulsory threshold is £90,000.

HMRC says you must register if either:

• taxable turnover over the last 12 months goes above £90,000; or
• you expect taxable turnover to go above £90,000 in the next 30 days.

There are special cases, exceptions and overseas-business rules. You can also register voluntarily below the threshold, but compare the effect on prices, customers, purchases, cash flow and administration first.

Before you start the application

Prepare the information HMRC asks for.

Limited company: company number, bank details, UTR, annual turnover, estimated taxable turnover for the next 12 months and relevant Corporation Tax, PAYE and Self Assessment information.

Individual or partnership: National Insurance number, identity document, bank details, UTR if available, annual turnover, estimated taxable turnover for the next 12 months and relevant Self Assessment or employment information.

Keep those details in your own secure records. Do not put bank details, identity documents, UTRs or passwords into My Business Path notes.

Register step by step

1. Open Register for VAT on GOV.UK and complete the current threshold and timing check.
2. Record why registration is compulsory, voluntary or not currently required, including the turnover figure and date checked.
3. If registering, open How to register for VAT and choose Start now.
4. Sign in or create the HMRC sign-in details requested by the service. The application can usually be saved and completed later.
5. Submit the application and save the acknowledgement securely.
6. Record VAT application submitted in the roadmap and add a date to check for HMRC's reply.

While waiting for the VAT number

The effective date matters. HMRC explains that you cannot show VAT on invoices until the VAT number arrives, even though VAT can be due from the effective date. Read the live waiting-period guidance and take advice if invoices must be issued during this period.

After registration

• Save the VAT number and effective date securely.
• Add VAT services to the business tax account if instructed.
• Update prices, quotations, invoice wording and accounting software.
• Put the first VAT Return and payment dates into the roadmap.
• Keep VAT money visible in cash flow rather than treating it as spendable income.
• Use Making Tax Digital-compatible VAT records unless HMRC confirms an exemption.

What complete looks like

The threshold decision is evidenced, the correct effective date is understood, the application is complete when required, the accounting and invoicing setup is ready and the next monthly turnover review or VAT Return date is scheduled.

Get help if

Get VAT advice for overseas sales, marketplaces, land and property, mixed or exempt supplies, business transfers, unusual schemes, voluntary registration uncertainty or a threshold already crossed.