VAT Threshold 2026: UK Registration & Deregistration Limits

Short answer: the UK VAT threshold for 2026 is £90,000 of taxable turnover. Once your sales over the last 12 months go above £90,000, you have 30 days from the end of that month to tell HMRC. If your turnover later drops, you can deregister once you expect it to stay at or below £88,000 for the next 12 months. Both figures have applied since 1 April 2024.

This guide is the detailed version for UK online sellers: Shopify and WooCommerce stores, Etsy and Amazon sellers, makers who also sell at markets, and freelancers and SaaS founders who bill other businesses. For the wider picture of UK VAT, start with the UK VAT guide.

Do I need to register for VAT? Find your situation

Your situation	Do you have to register?	Deadline and start date
UK business, taxable turnover in the last 12 months is over £90,000	Yes	Tell HMRC within 30 days of the end of the month you went over. You’re registered from the 1st of the second month after
UK business, you expect the next 30 days alone to bring in over £90,000	Yes	Tell HMRC by the end of that 30-day period. You’re registered from the day you realised
You went over £90,000 once, but expect £88,000 or less in the next 12 months	Maybe not. Apply for an exception	Apply straight away. HMRC replies within 40 working days
UK business, turnover under £90,000	No, but you can register voluntarily	Any time. A voluntary registration can be backdated up to 4 years
All your sales are exempt (for example insurance or some training)	No, and you can’t register	Not applicable
Business based outside the UK selling to UK customers	Yes, from your first UK sale, unless all your UK sales are to consumers through online marketplaces, or all are zero-rated	Within 30 days of your first UK sale, or of first expecting one
Already registered, and you expect £88,000 or less in the next 12 months	You can deregister if you want to	From the date HMRC receives your request, or a later date you agree

“Taxable turnover” is the value of your sales, before costs. It includes zero-rated sales. The what counts section below has the details.

The VAT threshold in 2026

	Amount	In force since
VAT registration threshold	£90,000	1 April 2024
VAT deregistration threshold	£88,000	1 April 2024

HMRC lists these as the current figures in the VAT Notice 700/1 supplement. The deregistration threshold is set £2,000 lower so that a business trading right around the limit doesn’t have to register and deregister every few months.

Was the VAT threshold frozen in the November 2025 Budget?

The Budget on 26 November 2025 made no change. The rates and allowances annex of the Budget 2025 Overview of Tax Legislation and Rates lists the registration threshold as £90,000 and the deregistration threshold as £88,000 “from April 2026”, the same as from April 2025.

What the Budget did not do is announce a freeze until a particular year. You may see “frozen until 2030” online: we couldn’t find that in any official Budget document. The accurate position is that the threshold stays at £90,000 until the government announces otherwise. When it set the £90,000 figure, the government described it as higher than any EU country’s threshold and among the highest in the OECD.

Watch this date: the Autumn Budget 2026 is on 28 October 2026. We’ll update this page if it changes either threshold.

UK VAT threshold history

Tax year	Registration threshold	Deregistration threshold
2016 to 2017	£83,000	£81,000
2017 to 2018	£85,000	£83,000
2018 to 2019	£85,000	£83,000
2019 to 2020	£85,000	£83,000
2020 to 2021	£85,000	£83,000
2021 to 2022	£85,000	£83,000
2022 to 2023	£85,000	£83,000
2023 to 2024	£85,000	£83,000
2024 to 2025	£90,000	£88,000
2025 to 2026	£90,000	£88,000
2026 to 2027	£90,000	£88,000

Each tax year runs from 1 April to 31 March. The limit sat at £85,000 for seven years until the Spring Budget 2024 increase took effect on 1 April 2024. HMRC’s manual VATREG04100 has the full list back to 1973.

The two tests: rolling 12 months and the next 30 days

There are two separate tests. You have to register if you meet either of them. Both are set out on gov.uk’s When to register for VAT page and in VAT Notice 700/1.

	Rolling 12-month test (looking back)	30-day test (looking forward)
The question	At the end of any month, were your taxable sales in the last 12 months over £90,000?	Do you expect your taxable sales in the next 30 days alone to go over £90,000?
Deadline to tell HMRC	30 days after the end of the month you went over	By the end of that 30-day period
You’re registered from	The 1st day of the second month after you went over	The date you first expected to go over
Who it usually catches	Growing shops and freelancers	A business that lands one very large order or contract

The rolling 12-month test

This is the test almost every small business meets first. “The last 12 months” is not your financial year or the tax year. It’s a rolling window that moves forward one month at a time. At the end of each month, add up your taxable sales for that month and the 11 before it.

Every channel counts together: your Shopify store, Etsy, Amazon, Instagram orders paid by payment link, craft fairs and wholesale orders. It’s one business, so it’s one total.

Worked example: a Shopify candle shop crosses £90,000 in July 2026

Maple & Moss is a candle shop in Leeds. It sells through Shopify, Etsy and two Christmas markets a year. All its products are standard-rated. The owner checks the rolling total at the end of each month:

Month end	Sales this month	Same month a year earlier (drops out)	Rolling 12-month total
31 May 2026	£8,900	£6,100	£84,300
30 June 2026	£9,500	£6,200	£87,600
31 July 2026	£10,400	£6,800	£91,200

At the end of July 2026 the rolling total is £87,600 + £10,400 − £6,800 = £91,200. That’s over £90,000.

Deadline to tell HMRC: 30 August 2026 (30 days after 31 July)
Registered from: 1 September 2026 (the 1st of the second month after July)
What changes: from 1 September, every sale includes 20% VAT

On a £30 candle, Maple & Moss now has two options. Keep the price at £30, and £5 of it is VAT (£30 × 1/6), so the shop keeps £25. Or raise the price to £36, so the shop still keeps £30. Most small shops land somewhere in between.

What if Maple & Moss notices late?

Say the owner only notices in February 2027. HMRC still registers the shop from 1 September 2026, and VAT is due on every sale since then. Because the shop didn’t charge VAT, HMRC treats the prices it charged as including VAT (VATREG26550).

Sales from 1 September 2026 to 31 January 2027, including Christmas: £48,000
VAT treated as included: £48,000 × 1/6 = £8,000
Less VAT on costs the shop can reclaim (wax, jars, packaging, with VAT invoices): £1,400
Net VAT owed: £6,600, paid out of the shop’s own margin

On top of that, HMRC can charge a failure to notify penalty. If the mistake was careless and the owner tells HMRC before being contacted, within 12 months, the range is 0% to 30% of the £6,600: up to £1,980. See late registration penalties below.

The 30-day forward-look test

This test is about a single 30-day window, not your annual total. It only applies if you expect the sales in the next 30 days on their own to go over £90,000. Your earlier sales don’t matter for this test.

Worked example: a furniture maker lands a hotel contract

Northfold Studio makes furniture in Bristol. Its sales over the last 12 months are £50,000, well under the threshold. On 14 September 2026 it signs a contract to fit out a hotel: £96,000 of furniture, all to be delivered and invoiced by 10 October 2026.

Expectation arises: 14 September 2026, the day the contract is signed
Deadline to tell HMRC: 13 October 2026 (the end of the 30-day period that starts on 14 September)
Registered from: 14 September 2026
The invoice: £96,000 + £19,200 VAT = £115,200. The hotel is VAT-registered, so it reclaims the £19,200 and the VAT costs it nothing in the end

If the same contract were spread over three months at £32,000 a month, no single 30-day period would go over £90,000, so the forward-look test wouldn’t apply. The rolling 12-month test would still catch it a month or two later, so keep counting.

What counts towards the VAT threshold

HMRC defines taxable turnover as the total value of everything you sell that isn’t exempt from VAT or outside the scope of UK VAT. In practice:

Counts towards £90,000	Doesn’t count
Standard-rated sales (20%): most goods and services	Exempt sales: insurance, most financial services, some education and health services
Reduced-rated sales (5%): for example child car seats	Sales outside the scope of UK VAT, such as digital services sold to consumers in the EU
Zero-rated sales (0%): children’s clothing, books, most food	Services to overseas business customers that are taxed where the customer is
Goods exported from the UK (they’re zero-rated)	Goods sold abroad that never pass through the UK
Services you buy from overseas suppliers under the reverse charge	Sales of your business’s capital assets, such as a van or equipment
Goods you hire out, barter, part-exchange or give away as business gifts

Turnover is not profit

The test uses sales, not what’s left after costs. A dropshipping store that sells £95,000 of goods and keeps £15,000 after paying suppliers and ad platforms must register. It doesn’t matter that the profit is far below £90,000.

Zero-rated sales count

A bookshop or a children’s clothing brand may charge 0% VAT on everything it sells, but those sales still count. They’re taxable at a rate of 0%. A business whose sales are all or mostly zero-rated can ask HMRC for an exemption from registration (VAT Notice 700/1, section 3.11), but it has to apply. It isn’t automatic.

Sales to customers outside the UK

Physical goods you ship abroad from the UK are zero-rated exports. They count towards the £90,000, even though you charge no UK VAT on them.
Digital services sold to EU consumers, such as online courses, e-books, downloads or software subscriptions, are taxed in the customer’s country, not the UK. They’re outside the scope of UK VAT and don’t count towards the UK threshold. But there’s no EU threshold for UK businesses, so you owe EU VAT on them from the first sale, usually through the non-Union OSS scheme.
Services to overseas businesses are generally taxed where the business customer is, so they don’t count either.

If you only make sales that would be taxable in the UK but take place abroad, you can still choose to register voluntarily to reclaim UK VAT on your costs (VAT Notice 700/1, section 2.9).

The reverse charge trap

If you buy business services from a supplier outside the UK, such as advertising or software billed from abroad, the reverse charge can apply. HMRC adds the value of those services to your own taxable turnover when working out whether you need to register. A business with £80,000 of sales and £12,000 of reverse-charge services from overseas suppliers has gone over £90,000. Check where your biggest suppliers bill you from.

Non-UK businesses: there is no threshold

The £90,000 threshold is only for businesses established in the UK. If you and your business are based outside the UK, you’re a non-established taxable person (NETP), and you must register for UK VAT from your first taxable sale in the UK, whatever its value. You must tell HMRC within 30 days of making that sale, or of first expecting to make one (VAT Notice 700/1, section 9).

A registered, serviced or virtual office in the UK doesn’t make you UK-established. You need your central management in the UK, or a real permanent presence with your own staff and equipment.

Online marketplaces collect VAT on overseas sellers’ goods

Since 1 January 2021, online marketplaces are liable for the VAT on two kinds of sale to UK consumers:

Goods worth £135 or less sent from outside the UK. The £135 is the value of the whole consignment.
Goods of any value already in the UK (for example in a fulfilment warehouse) when an overseas seller sells them.

If every UK sale you make is to consumers through a marketplace, you may not need to register at all. If you import stock into a UK warehouse yourself, you’ll usually still register, because you pay import VAT on the way in and need a VAT number to reclaim it.

These rules only apply to overseas sellers. A UK-based seller on Etsy, Amazon or eBay accounts for VAT on its own sales, and those sales count towards its £90,000.

Voluntary VAT registration: is it worth it?

You can register for VAT at any time while your turnover is under £90,000, as long as you’re in business and make taxable sales. Once you’re registered, you must charge VAT on all your taxable sales and file returns through Making Tax Digital software, just like a business that had to register.

Pros	Cons
You reclaim VAT on your costs: stock, equipment, software, packaging	You must add 20% to your prices, or absorb it
Business customers reclaim your VAT, so it costs them nothing	Consumers can’t reclaim it, so you become 20% dearer than unregistered rivals, or earn less
A VAT number can make a small business look established to bigger clients	Quarterly returns, MTD software and record-keeping
No scramble when you later cross £90,000	You stay registered until you deregister

Worked example: same costs, different customers

Two businesses each have £45,000 of sales a year and £12,000 of costs, with £2,400 of VAT on those costs.

A freelance web designer billing UK companies. Registered, she charges £45,000 + £9,000 VAT. Her clients reclaim the £9,000, so their costs don’t change. She reclaims the £2,400 on her laptop, software and coworking. She’s £2,400 a year better off, before the cost of bookkeeping software.

An Etsy jewellery seller selling to consumers. If she registers and keeps her prices the same, £7,500 of her £45,000 is now VAT (£45,000 × 1/6). She reclaims £2,400, so she pays HMRC £5,100. She’s £5,100 a year worse off. To stand still she’d have to raise prices by about 20%, which her unregistered competitors don’t have to do.

The rule of thumb: voluntary registration usually pays for businesses that sell mainly to VAT-registered businesses or have high VAT-able costs, and usually doesn’t pay for businesses that sell mainly to consumers.

Backdating a voluntary registration

You can ask HMRC to backdate a voluntary registration by up to 4 years (VAT Notice 700/1, section 3.9). You then owe VAT on standard- and reduced-rated sales from that date. Backdating helps when you’ve had large VAT-able costs, such as fitting out a workshop, because once registered you can reclaim VAT on:

goods bought up to 4 years before your registration date that you still have
services bought up to 6 months before your registration date

You claim this on your first VAT return. A request to change the registration date can’t be appealed, so decide carefully before you apply.

The temporary exception: crossing £90,000 just once

If you go over £90,000 because of a one-off, you can ask HMRC not to register you. You qualify if, at the end of the month you crossed, you can show that your taxable turnover in the next 12 months will not go over £88,000 (the deregistration threshold).

Example: an illustrator usually earns £60,000 a year. A one-off £30,000 licensing deal takes her rolling total to £93,000 at the end of March 2026. She expects £62,000 over the next 12 months. She can apply for an exception.

How to apply:

Phone HMRC, ask for form VAT1 and say you want an exception.
HMRC sends you form VAT1 and form VAT5EXC. Fill in both and send them back, with a full explanation of why your turnover will drop.
HMRC writes to you within 40 working days.

If HMRC refuses, it uses your VAT1 to register you from the date you were liable, and you owe VAT from that date. So apply as soon as you know, and keep money aside until you hear back. If HMRC agrees, keep checking your turnover every month. If you go over again, you have to register or apply again.

Late registration penalties

If you register late, HMRC can charge a failure to notify penalty under Schedule 41 of the Finance Act 2008. It’s a percentage of the “potential lost revenue”: broadly, the net VAT you should have paid from your correct registration date. The ranges come from HMRC’s factsheet CC/FS11:

Why you didn’t tell HMRC	You tell HMRC first (unprompted)	HMRC contacts you first (prompted)
Not deliberate (for example careless), told within 12 months	0% to 30%	10% to 30%
Not deliberate, told 12 months or more late	10% to 30%	20% to 30%
Deliberate	20% to 70%	35% to 70%
Deliberate and concealed	30% to 100%	50% to 100%

Where you land in each range depends on how much you help: telling HMRC, helping it work out the figures and giving access to your records. HMRC usually limits the reduction if it takes you a long time (such as 3 years or more) to come forward.

There’s no penalty if you had a reasonable excuse, the failure wasn’t deliberate, and you told HMRC without unreasonable delay once the excuse ended. HMRC applies this strictly. Not having the money to pay the VAT is not a reasonable excuse.

The penalty is usually smaller than the VAT itself. In the Maple & Moss example, the VAT bill was £6,600 and the penalty at most £1,980. The fastest way to keep both small is to register the moment you realise, and before HMRC writes to you.

Deregistering below £88,000

You can ask HMRC to cancel your VAT registration if your taxable turnover in the next 12 months won’t go over £88,000, worked out without VAT (VAT Notice 700/11). It’s optional. Some businesses stay registered because they sell to other businesses or reclaim a lot of VAT.

You must explain why your turnover will fall and give your expected turnover for the next 12 months.
HMRC refuses if the drop is because you plan to stop trading, or to stop making taxable sales for 30 days or more in the next 12 months.
Shops must cut prices too. If you sell to consumers, HMRC wants to see that you’ll reduce your prices by the VAT, not keep the extra. Otherwise adding the VAT back would put you over the threshold.
No backdating. Your registration ends on the day HMRC receives your request, or a later date you agree.
Stock and assets: on your final return you pay VAT on stock and assets you still hold and reclaimed VAT on, unless the total VAT due is £1,000 or less.
Non-UK businesses can’t deregister on the grounds of low turnover, because there’s no threshold for them.

You must cancel within 30 days if you stop being eligible, for example if you stop trading or stop making taxable sales. Use gov.uk’s Cancel your VAT registration service.

Other countries’ VAT thresholds

The UK threshold is unusually high. For comparison:

Country or scheme	Threshold (2026)	Who can use it
United Kingdom	£90,000 registration, £88,000 deregistration	UK-established businesses
Ireland	€85,000 for goods, €42,500 for services (since 1 January 2025)	Irish-established businesses (Revenue)
Germany (Kleinunternehmer)	€25,000 last year and €100,000 this year (since 1 January 2025)	German-established businesses, or EU businesses through the EU SME scheme (§19 UStG)
France (franchise en base)	€85,000 for goods, €37,500 for services, with a 10% margin in the current year	French-established businesses. A planned single €25,000 threshold was dropped (Service-Public)
Netherlands (KOR)	€20,000 per calendar year, this year and last	Dutch-established businesses that opt in (Belastingdienst)
EU distance-selling threshold	€10,000 a year EU-wide, for cross-border sales to consumers	EU-established businesses only
EU SME scheme (since 1 January 2025)	€100,000 EU-wide turnover, and under each country’s own threshold (at most €85,000)	EU-established businesses only (European Commission)

The EU small business schemes in Germany, France and the Netherlands are exemptions: below the limit you don’t charge VAT and can’t reclaim it.

For UK sellers, none of these EU thresholds apply. Since Brexit, a UK business selling to EU consumers is a non-EU seller with no threshold in any EU country. You owe EU VAT from the first sale, usually collected through IOSS for parcels of €150 or less, or through the non-Union OSS for digital services. See selling to EU consumers from the UK and the country guides for Germany, France, Ireland and the Netherlands.

What to do when you’re getting close

Track your rolling 12-month total every month. Include every channel and every zero-rated sale. A spreadsheet with one row per month is enough.
Set an early warning at about £80,000. That gives you time to decide on pricing before you’re forced to.
Decide on prices. Will you absorb the 20%, pass it on, or split it?
Register on time through gov.uk’s Register for VAT service. The UK VAT setup checklist walks through registration, choosing a scheme and your first return.
Set up VAT on your store from your registration date: Shopify, WooCommerce, Etsy, BigCommerce, TikTok Shop, Instagram, Facebook or a custom store.
Learn the day-to-day rules: rates, invoices and quarterly returns are in selling to UK customers.

Let GoodVat watch the threshold for you

Adding up a rolling total across Shopify, Etsy, Amazon and market takings every month is easy to forget, and the cost of forgetting is VAT out of your own margin. GoodVat:

Tracks your rolling 12-month turnover across your sales channels and warns you before you reach £90,000
Registers you with HMRC, on time
Calculates the right VAT for every product at checkout
Files your Making Tax Digital returns and sends compliant VAT invoices

FAQ

What is the VAT threshold for 2026?

The UK VAT registration threshold for the 2026 to 2027 tax year is £90,000 of taxable turnover. The deregistration threshold is £88,000. Both figures have applied since 1 April 2024 and were confirmed unchanged from April 2026 in the November 2025 Budget documents.

Has the VAT threshold been frozen?

The November 2025 Budget left the threshold at £90,000 for 2026 to 2027 but did not announce a freeze for a set number of years. The threshold stays at £90,000 until the government announces a change. The next Budget is on 28 October 2026, so check gov.uk after that date.

Do I need to register for VAT if my turnover is under £90,000?

No, not if your business is based in the UK. You only have to register once your taxable turnover goes over £90,000 in a rolling 12 months, or you expect it to go over £90,000 in the next 30 days alone. You can still register voluntarily, which often makes sense if most of your customers are VAT-registered businesses.

Do zero-rated sales count towards the VAT threshold?

Yes. Zero-rated sales, such as children’s clothing, books and most food, are taxable supplies at 0%, so they count towards the £90,000. Exported goods count too, because exports are zero-rated. Exempt sales, such as insurance, and sales that are outside the scope of UK VAT don’t count.

Is the VAT threshold based on turnover or profit?

Turnover. The test uses the total value of your taxable sales, before any costs are taken off. A shop that sells £95,000 of goods in 12 months and makes only £20,000 profit must still register for VAT.

Can you backdate VAT registration?

Yes. If you register voluntarily, you can ask HMRC to backdate your registration by up to 4 years. You then owe VAT on your sales from that date, and you can reclaim VAT on goods bought up to 4 years before registration that you still hold, and on services bought up to 6 months before. If you registered late, HMRC backdates you to the date you should have registered whether you ask or not.

What happens if I register for VAT late?

HMRC registers you from the date you should have been registered and you owe VAT on all your sales since then, even though you didn’t charge it. HMRC treats the prices you charged as including VAT. You can also get a failure to notify penalty of up to 30% of the VAT due if the mistake was careless, and more if it was deliberate.

Is there a VAT threshold for non-UK businesses?

No. A business based outside the UK must register for UK VAT from its first taxable sale in the UK, whatever its turnover. The main exceptions are when all of its UK sales are made to consumers through online marketplaces, which collect the VAT, or when all its UK supplies are zero-rated.

UK VAT guide: rates, schemes and filing at a glance
UK VAT setup checklist: what to do, step by step, once you’ve crossed £90,000
Selling to UK customers: rates, invoices and quarterly returns for UK sellers
Shopify VAT setup for UK sellers: turning on VAT in your Shopify store
Selling to EU consumers from the UK: IOSS, the €150 limit and why there’s no EU threshold for UK sellers
Non-Union OSS for digital services: EU VAT on software, courses and downloads sold from the UK