VAT Registration Guide (2025/26)

Value Added Tax (VAT) is a tax charged on most goods and services provided by registered businesses in the UK.

When must you register?

You must register for VAT if:

• Your VAT taxable turnover goes over £90,000 (the 2025/26 threshold).
• You know that your VAT taxable turnover will go over £90,000 in the next 30 days.

Voluntary Registration

You can choose to register voluntarily if your turnover is less than £90,000. This can be beneficial if you sell to other VAT-registered businesses and want to reclaim the VAT you pay on your purchases.

VAT Schemes

Small businesses can use schemes to simplify their VAT:

• Flat Rate Scheme: You pay a fixed rate of VAT to HMRC. You keep the difference between what you charge your customers and pay to HMRC. You can’t reclaim VAT on purchases (except for certain capital assets over £2,000).
• Cash Accounting Scheme: You pay VAT on your sales when your customers pay you, and reclaim VAT on your purchases when you have paid your suppliers.
• Annual Accounting Scheme: You make advance VAT payments towards your VAT bill and submit one VAT Return a year.