You normally have to register for VAT when your VAT taxable turnover goes over £90,000 in a rolling 12-month period. A separate rule applies if you expect to exceed £90,000 in the next 30 days alone. Both tests concern sales, not the profit left after materials and other costs.

For a UK-based sole trader, the useful habit is to check turnover every month and review large contracts before agreeing them. Waiting for your annual accounts can leave you dealing with VAT after the customer has already paid.

Check the previous 12 months

At each month end, add up the VAT taxable turnover for the 12 months ending that day. Next month, remove the oldest month and add the new one. This is a moving total, not a fresh allowance every January or April.

If you go over £90,000, you normally have 30 days after that month ends to register. Your registration normally takes effect on the first day of the second month after you crossed the threshold. HMRC explains both the deadline and effective date.

Illustrative example: your taxable turnover for the 12 months to 31 August is £92,000. The normal registration deadline is 30 September, with VAT registration effective from 1 October. Check the dates against your own circumstances before changing invoices.

Check the next 30 days separately

A large contract can trigger registration even when the past year's total is lower. If you realise that taxable turnover will exceed £90,000 in the next 30 days alone, you must normally register by the end of that period. The effective date is the date you realised this would happen.

Do not confuse this with a forecast that you might cross £90,000 over the coming year. The forward-looking test concerns just those next 30 days.

Use taxable turnover, not the bank balance

Include sales that would attract standard, reduced or zero-rate VAT. Zero-rated work still counts towards taxable turnover. Exempt and outside-scope supplies have different treatment. VAT Notice 700/1 explains what to include and the exceptions.

Materials charged to the customer are not automatically removed from turnover because you bought them from a merchant. Nor is turnover reduced to the cash received after a CIS deduction. Deposits, staged payments and unusual contracts can affect timing. Get help if your records do not give you a clear answer.

A practical monthly check needs the sales records behind each total, a note of any exclusions and the date you checked them. The VAT threshold checker can help you total the figures, but it cannot decide the VAT treatment of a particular supply.

Would voluntary registration suit your work?

You can register below the threshold. Before doing so, compare two versions of your usual jobs: the customer price and recoverable purchase VAT before registration, then the position afterwards.

A VAT-registered commercial customer may be able to recover the VAT you charge. A householder generally cannot. Keeping the same final price for a domestic job may therefore leave less for your business once VAT is due. Increasing it may affect the customer's decision.

The answer depends on your customers, purchases and margins. A registration number is not, on its own, a reason to register voluntarily.

Prepare quotes and invoices for the change

1. Confirm the effective date and which jobs cross it.

2. Review outstanding quotes and contracts before promising a final customer price.

3. Check the required VAT invoice details and the correct rate for each supply.

4. Set up the records and software needed for VAT returns.

5. For construction work supplied to another business, check the domestic VAT reverse charge separately.

If you discover that registration is overdue, contact HMRC or your accountant promptly. VAT can be due from the date you should have registered, including on work already invoiced. Do not wait for the next tax return to raise it.

Written by Chris, founder of TradePilot.

This is general information, not personal tax advice. Official guidance checked on 16 September 2026. VAT treatment depends on the supply, customer and contract.