VAT Registration Threshold Calculator (UK, 2026/27)
How the tests work
- Historic test: Your rolling 12‑month turnover is £75,000. This is below the £90,000 threshold.
- Forward look test: Your expected turnover for the next 30 days is £7,000. This is below the £90,000 threshold.
- Result: You are not currently required to register.
Understanding the VAT threshold
The VAT registration threshold is the maximum taxable turnover you can have in a rolling 12‑month period before you are legally required to register for VAT with HMRC. For the 2026/27 tax year, that threshold is £90,000. Your taxable turnover is the total value of everything you sell that is not exempt from VAT, before deducting any of your business expenses. It is based on your gross income, not your profit.
The 12‑month test is a rolling window, not a fixed tax year. Every month, you look back at the previous 12 months’ turnover. If at any point that total exceeds £90,000, you must register. This means a single high month can trigger registration even if the rest of the year is quiet.
There is also a forward look test — if you expect your turnover in the next 30 days alone to exceed £90,000 (e.g., because you have just signed a large contract), you must register immediately. This is separate from the historic test, so even if your last 12 months were under £90,000, a big upcoming month can force registration.
You can also choose to register voluntarily before hitting the threshold. This can be beneficial if you want to reclaim VAT on your purchases (e.g., equipment, software, or stock). However, you must then charge 20% VAT to your clients, which may be a problem if they cannot reclaim it themselves. Weigh the pros and cons carefully.
This calculator is a planning tool to help you understand where you stand. It does not replace HMRC’s own guidance or official advice. The figures used (£90,000 and £88,000) are for the 2026/27 tax year and may change in future years.
Frequently Asked Questions
What counts towards taxable turnover?
Taxable turnover includes all sales of goods and services that are not exempt from VAT. This includes standard‑rated (20%), reduced‑rated (5%), and zero‑rated (0%) supplies. It does not include VAT itself, or sales that are entirely outside the scope of UK VAT (e.g., exports to non‑business customers outside the UK). Expenses are not deducted — it is your gross income.
What if I go over the threshold for one month only and then drop back below?
The test is based on a rolling 12‑month total, so a single high month can push you over the threshold. If that happens, you must register and will normally have to stay registered for at least 12 months, even if your turnover later falls below £90,000. Registration is not automatically cancelled when your turnover drops — you have to actively deregister when eligible (turnover below £88,000).
Should I register voluntarily before I have to?
It depends on your situation. Voluntary registration lets you reclaim VAT on your business purchases. If your clients are other VAT‑registered businesses, they can reclaim the VAT you charge, so it may be neutral for them. But if your clients are the general public or businesses that cannot reclaim VAT, charging 20% extra could make you less competitive. Consider both the cash flow benefit of reclaiming VAT and the impact on your pricing.