What VAT registration is and who needs it
Once registered, a business charges VAT on its taxable sales, pays that VAT to HMRC and reclaims the VAT it pays on business purchases. It also files VAT returns, normally every 3 months, and keeps digital records under Making Tax Digital.
There are three routes into registration:
- Compulsory, UK-established businesses: when taxable turnover passes the registration threshold.
- Compulsory, businesses based outside the UK: from the first UK taxable supply, whatever the amount.
- Voluntary: any business below the threshold that chooses to register.
The standard rate of VAT is 20%, with a reduced rate of 5% and a zero rate for some goods and services.
Compulsory VAT registration
The VAT registration threshold is £90,000 of taxable turnover. Our VAT registration threshold guide covers how to measure turnover, what counts and what does not.
HMRC applies two tests, and the registration deadline and effective date differ between them.
| Test | When you must register | Effective date of registration |
|---|---|---|
| Past 12 months: taxable turnover for the last 12 months went over the threshold | Within 30 days of the end of the month in which you went over | The first day of the second month after you went over |
| Next 30 days: you expect to go over the threshold in the next 30 days alone | By the end of that 30-day period | The date you realized you would go over, not the date turnover passed the threshold |
If you register late, you must pay VAT on any sales made since the date you should have registered, even if you did not charge your customers VAT, and you may also be charged a penalty. VAT Notice 700/1 explains that the penalty is a percentage of the net VAT due for the late period.
Businesses based outside the UK (NETPs)
A non-established taxable person (NETP) has no registration threshold. HMRC's manual says "NETPs must notify HMRC of their liability to be registered regardless of the value of the taxable supply". You must register within 30 days of making, or expecting to make, your first UK taxable supply.
This matters for founders running a UK Ltd from Pakistan, India, Nigeria, the UAE or elsewhere. HMRC says "A company incorporated in the UK would not alone constitute a UK establishment". What counts is where the business is managed and run. A UK company whose director makes every decision from abroad may therefore be a NETP and need to register from its first UK sale.
Whether your business has a UK establishment is a tax judgment that depends on your facts. We can file the registration once the position is clear, but the decision itself needs a licensed UK tax adviser. For online sellers, our guide to UK VAT for non-resident sellers covers marketplace rules.
Voluntary VAT registration
You can choose to register for VAT with turnover below £90,000. Businesses do this to reclaim VAT on costs, because business customers expect a VAT number, or because they are about to pass the threshold.
- Effective date: you choose it. VAT Notice 700/1 says a voluntary registration can be backdated by up to 4 years, and a date request cannot be appealed later, so choose carefully.
- Intending traders: a business that has not started selling yet can register if it has a real intention to make taxable supplies.
- Pre-registration VAT: you can reclaim VAT on goods bought for the business up to 4 years before registration (if you still hold them) and on services up to 6 months before, on your first VAT return.
The trade-off: if your customers are consumers who cannot reclaim VAT, registering usually means either raising prices by 20% or absorbing the VAT. Weigh that before you register, and take advice if the numbers are close.
How to register for VAT with HMRC
Most businesses register online by signing in to HMRC's service, and the application does not have to be finished in one sitting. HMRC does not charge a fee to register. Paper form VAT1 is only for certain cases, such as applying for a registration exception, some groups and divisions, and insolvency practitioners. HMRC says postal applications usually take longer than online ones.
Non-UK businesses also register through HMRC's online VAT registration service, at the address of their principal place of business.
What you get after registering
HMRC sends the registration details by post:
- a 9-digit VAT registration number, which must appear on every VAT invoice you issue;
- information on setting up a business tax account to use HMRC's VAT online services;
- when your first VAT return and payment are due;
- confirmation of your effective date of registration.
The certificate of registration (VAT4) is not routinely posted. HMRC's manual says it can be found in the VAT online account. Banks and marketplaces sometimes ask for a copy, so download it once your account is set up.
What changes from your effective date
From the effective date you must account for VAT on your taxable sales, even before the number arrives. HMRC says you cannot include VAT on invoices until you get your registration number, but you can raise your prices to cover the VAT you will owe, then issue VAT invoices once the number arrives.
- Making Tax Digital: HMRC signs new registrations up to Making Tax Digital for VAT automatically, unless the business is exempt. You need MTD-compatible software and digital records from your first return.
- VAT returns: normally every 3 months. Our VAT returns service covers deadlines, penalties and filing.
- Records: keep records of all sales and purchases and VAT invoices for the VAT you reclaim.
VAT schemes to consider at registration
Small businesses can often use a simplified scheme. The two most common are below.
| Scheme | How it works | Who can join |
|---|---|---|
| Flat Rate Scheme | You pay HMRC a fixed percentage of your VAT-inclusive turnover and keep the difference. You cannot reclaim VAT on purchases, except certain capital assets over £2,000. | VAT turnover of £150,000 or less (excluding VAT) |
| Cash Accounting Scheme | You pay VAT on sales when customers pay you and reclaim VAT on purchases when you pay suppliers. | Estimated VAT taxable turnover of £1.35 million or less in the next 12 months; you must leave above £1.6 million |
Under the Flat Rate Scheme, a "limited cost business" (goods costing less than 2% of turnover or £1,000 a year) pays 16.5%, which reduces the benefit for many service businesses. There is a 1% discount in the first year of VAT registration. The two schemes cannot be used together. Which scheme suits you is a tax decision, so ask an accountant if you are unsure.
What is included in our VAT registration service
- A short intake to confirm whether you are registering compulsorily, voluntarily or as a business based outside the UK.
- Preparation of the online application from your details, checked before submission.
- Submission to HMRC and tracking of the application in your portal.
- Your VAT number, effective date and HMRC letters stored in your portal once received.
- A reminder of your first VAT return deadline.
Not included
- Advice on UK establishment, place of supply or which VAT scheme to choose.
- Bookkeeping or VAT returns (available separately).
- Any guarantee that HMRC will approve an application or register you by a set date. HMRC may ask for more information before it decides.
How it works
- Order and intake: start your order and answer questions about your business, sales and turnover.
- Secure document upload: send company details, identity documents and bank details through the portal (see our security page).
- Preparation and review: our filing team prepares the application and sends it to you to check.
- Submission: once you approve, the application goes to HMRC.
- Tracking: any HMRC questions come back to you through the portal with a suggested reply.
- Delivery and reminders: your VAT number and effective date go into the portal, with a reminder for your first return.
What we need from you
- Business type and details: company number and UTR, or your details as a sole trader.
- A description of what you sell, to whom, and where the business is managed.
- Turnover so far and expected turnover for the next 12 months.
- The date you went over, or expect to go over, the threshold, or the date you want a voluntary registration to start.
- Business bank account details for VAT repayments.
- Details of directors or partners.
Timelines
HMRC does not publish a fixed processing time on its registration guidance. It says online applications are usually processed faster than postal ones. Our team starts once your intake and documents are complete, and we never promise a date that HMRC has not published. Your legal obligations run from the effective date, not the date the number arrives, so apply as soon as you know you need to.
Doing it yourself vs using us
Registering for VAT is free and many owners do it themselves online. It works well when the business is UK-based, the numbers are simple and the effective date is obvious.
Our service helps when the business is run from abroad, when the effective date needs working out from monthly figures, when HMRC sends follow-up questions, or when you want registration and VAT returns handled together. If your company is new, see our UK company formation for non-residents.
Sources
- GOV.UK: Register for VAT
- GOV.UK: When to register for VAT
- GOV.UK: How to register for VAT
- GOV.UK: Register for VAT by post
- GOV.UK: Increasing the VAT registration threshold
- GOV.UK: Who should register for VAT (VAT Notice 700/1)
- HMRC manual: VATREG37050, non-established taxable persons
- HMRC manual: VATREG37150, UK establishment
- HMRC manual: VATREG03650, certificate of registration
- GOV.UK: VAT Notice 700/22, Making Tax Digital for VAT
- GOV.UK: VAT Flat Rate Scheme
- GOV.UK: VAT Cash Accounting Scheme eligibility
- GOV.UK: VAT rates
Fees, deadlines and rules on this page were last checked on 27 September 2026.