The VAT threshold: why the rolling 12 months catches people out
You must register for VAT when taxable turnover over any rolling 12 months passes £90,000, not at the end of your financial year.
The VAT registration threshold has been £90,000 since April 2024. The test looks back over the previous 12 months at the end of every month, so a strong few months can take a business over the line well before its year end.
The threshold is passed at the end of September: register by 30 October, and charge VAT from 1 November.
Show the data
| Jan | £71,000 |
|---|---|
| Feb | £73,000 |
| Mar | £75,000 |
| Apr | £78,000 |
| May | £80,000 |
| Jun | £83,000 |
| Jul | £86,000 |
| Aug | £88,000 |
| Sep | £92,000 |
| Oct | £95,000 |
| Nov | £97,000 |
| Dec | £99,000 |
Once you pass the threshold, you have 30 days from the end of that month to register, and you must charge VAT from the first day of the second month after it. There is also a test looking forward: if you expect taxable turnover in the next 30 days alone to exceed £90,000, you must register straight away.
Registering voluntarily below the threshold can make sense when most customers are VAT-registered businesses, because they can reclaim the VAT you charge and you can reclaim VAT on your costs.
Keeping watch
- Add up taxable turnover for the last 12 months at every month end.
- Leave out exempt sales, but include zero-rated ones.
- Talk to us well before you reach £90,000, so prices and systems are ready.
This insight is general information, not advice for your circumstances. Talk to us before acting on it.