The two numbers
The registration threshold is £90,000 of taxable turnover, measured over a rolling 12 months. The deregistration threshold is £88,000: if turnover falls below that you can ask HMRC to cancel your registration.
Both have been in place since 1 April 2024, when they rose from £85,000 and £83,000. Nothing published on gov.uk changes them from 1 April 2026.
| Threshold | Figure | What it means |
|---|---|---|
| Registration | £90,000 | You must register once taxable turnover goes over this in any 12 months |
| Deregistration | £88,000 | You can ask HMRC to cancel once turnover falls below this |
The rolling 12-month test
Look back over the last 12 months. If the total taxable turnover for that period goes over £90,000, you must register, and the clock starts at the end of the month you went over.
You then have 30 days from the end of that month to register, and your registration takes effect from the first day of the second month after you went over.
HMRC's own worked example: you go over the threshold on 15 July, you must register by 30 August, and you are registered from 1 September.
The forward look
The second test looks ahead rather than back. If you expect your taxable turnover to go over £90,000 in the next 30 days, you must register by the end of that period.
This is the test that catches work you have won but not yet invoiced. The effective date is different: you are registered from the date you realised, not from the end of a month.
If you go over only temporarily
A one-off contract can push you over without changing the shape of your business. There is an exception route rather than an exemption: at the end of any month you can apply if your taxable supplies went over the registration threshold in the last 12 months and you can show HMRC they will not go over the deregistration threshold in the next 12 months.
Registering late does not move the date
The effective date of registration is fixed by the rule, not by when you get round to registering. It stays the first day of the second month after the month you went over the threshold.
That is why the deadline matters more than the paperwork. If you think you may have crossed it, work out your rolling 12-month figure now and read HMRC's page on when to register.
Once you are registered: the flat rate scheme
Registering does not commit you to the standard method. The flat rate scheme lets you pay a single percentage of turnover instead of working out VAT on every sale and purchase.
You can join if your expected VAT taxable turnover, excluding VAT, is £150,000 or less in the next 12 months, and you leave if turnover in the last 12 months goes over £230,000 including VAT. There is a 1% discount on your rate for the first year, and it runs for 12 months from your VAT registration date rather than from the day you join the scheme.
One catch: a limited cost business pays 16.5% whatever sector it is in. You are a limited cost business if your relevant goods cost less than 2% of your VAT flat rate turnover, or more than 2% but less than £1,000 a year. That test can change what you pay from one return to the next.