When is VAT Registration Due?

What small business owners need to know

VAT registration is one of those areas that can catch small business owners out.

Many people assume VAT registration is based on their accounting year, tax year or company year end.

It is not.

VAT registration is based on your taxable turnover, and you must monitor this on a rolling 12-month basis.

What is the VAT registration threshold?

At today’s date, the UK VAT registration threshold is more than £90,000 of taxable turnover.

You must register if your taxable turnover for the last 12 months goes over £90,000, or if you expect your taxable turnover to go over £90,000 in the next 30 days.

Taxable turnover includes sales that are standard-rated, reduced-rated and zero-rated. It does not include VAT-exempt or outside-the-scope sales.

When is VAT registration due?

There are two main tests.

1. The rolling 12-month test

You must look back at the end of each month and check your taxable turnover for the previous 12 months.

If your taxable turnover has gone over £90,000, you must register within 30 days of the end of the month in which you crossed the threshold.

Your VAT registration date will usually be the first day of the second month after the threshold was crossed.

Worked example

A business checks its sales and realises that on 7 July 2026, its taxable turnover for the previous 12 months went over £90,000.

The threshold was crossed in July.

This means:

• the business must notify HMRC by 30 August 2026;

• the effective date of VAT registration will be 1 September 2026;

• from 1 September 2026, the business must charge VAT on taxable sales;

• the first VAT return will start from the VAT registration date.

This is because the registration date is the first day of the second month after the month in which the threshold was exceeded.

2. The next 30 days test

There is also a forward-looking test.

If you expect your taxable turnover to go over £90,000 in the next 30 days alone, you must register by the end of that 30-day period. Your VAT registration date is the date you realised this, not the date the money is received.

For example, if you agree a contract on 1 May worth more than £90,000 and the work will be supplied within the next 30 days, the VAT registration date could be 1 May.

What happens if you register late?

If you register late, HMRC can require you to pay VAT on sales made from the date you should have been registered. You may also have to pay a penalty, depending on how late the registration is and how much VAT is owed.

This can create a cash flow problem because you may not have charged VAT to your customers at the time.

Can you reclaim VAT from before registration?

Once registered, you may be able to reclaim VAT on certain business purchases made before the VAT registration date.

The main rules are:

• goods: you can usually reclaim VAT on goods bought up to 4 years before registration, but only if you still have the goods at the VAT registration date, or they were used to make other goods you still have;

• services: you can usually reclaim VAT on services bought up to 6 months before registration.

The purchases must relate to the VAT-registered business and to taxable supplies. You must also keep proper records and valid VAT invoices.

Simple pre-registration VAT example

The business registers for VAT from 1 September 2026.

It may be able to reclaim VAT on:

• stock bought in May 2026 that is still unsold on 1 September 2026;

• a laptop bought in October 2024 that is still used in the business;

• accountancy fees, software costs or professional services received from 1 March 2026 onwards, if they relate to the taxable business.

It normally cannot reclaim VAT on:

• stock already sold before the VAT registration date;

• services received more than 6 months before registration;

• costs with no valid VAT invoice;

• personal costs;

• costs relating to exempt sales.

Final thoughts

VAT registration is not something to check once a year.

Small business owners should monitor taxable turnover every month, especially when sales are growing.

The key questions are:

Has taxable turnover gone over £90,000 in the last 12 months?

Will taxable turnover go over £90,000 in the next 30 days?

What is the correct VAT registration date?

Can any pre-registration VAT be reclaimed?

At Busy Bee, we help small businesses monitor the VAT threshold, register at the right time and prepare the first VAT return correctly.

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Disclaimer: The content on this page is for general information only and should not be treated as tax, legal or financial advice. Tax planning should always be reviewed against your individual circumstances before action is taken.