Clear VAT answers, from people who know the rules.
Free, plain-English VAT resources from Senior VAT specialists. 32 articles and growing, written by former HMRC officers.
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Registration & Threshold
When you have to register for VAT, how the £90,000 threshold works, and when registering early pays off.
Do I have to register for VAT in the UK?
Whether you must register comes down to your taxable turnover and the £90,000 threshold. Here is who has to register, who can choose to, and what triggers it.
What is the VAT registration threshold in the UK?
The VAT registration threshold is £90,000 of taxable turnover. Here is exactly what counts towards it and how the rolling 12-month test works.
When do I need to register for VAT?
You must register once your taxable turnover crosses the threshold, whether on a rolling 12-month basis or by a forward look.
What counts as taxable turnover for VAT?
Taxable turnover is what you measure against the £90,000 threshold, and it is not simply everything you invoice. Here is what counts and what stays out.
Should I register voluntarily for VAT before I reach the threshold?
Registering before you have to can recover input VAT and add credibility, but it adds admin and can raise prices. Here is when registering early pays off.
What are the pros and cons of voluntary VAT registration?
Voluntary registration brings input VAT recovery and B2B credibility, but also pricing pressure, MTD compliance and a cash-flow cost.
Is the £90,000 threshold based on rolling 12 months or the tax year?
The threshold is tested on a rolling 12-month basis, not your tax year or accounting year. Here is how the rolling window works.
What happens if I go over the VAT threshold by accident or temporarily?
If your turnover only briefly crosses £90,000, you may be able to apply for an exception from registration. Here is how the exception works.
Can I apply for an exception if my turnover only temporarily exceeds the threshold?
The eligibility criteria for an exception from VAT registration, how to build the VAT5EXC evidence package, and what to do if HMRC refuses yours.
Do zero-rated sales count towards the VAT threshold?
Yes, zero-rated sales count towards the £90,000 UK VAT registration threshold, even though no VAT is charged on them. Here is why this catches sellers out.
How do I monitor my turnover to know when I'm getting close to the VAT threshold?
The practical routine for monitoring your UK taxable turnover against the £90,000 VAT threshold: how often to check, what to track, which software helps.
Why do small businesses deliberately stay below the VAT threshold?
Many UK small businesses cap their growth just below the £90,000 VAT threshold. We explain the rational reasons, the less-rational ones, and the real cost.
Why is the UK VAT threshold so high compared to other countries?
The UK VAT registration threshold of £90,000 is the highest in Europe and joint highest in the OECD. Here is the history and the cliff-edge debate.
Does Patreon income count towards the VAT threshold?
Patreon, OnlyFans, Substack, Ko-fi: how creator platform income affects your UK VAT threshold. Here is what counts and what HMRC sees via DAC7.
VAT Schemes
The optional schemes that can simplify your VAT or save you money: Flat Rate, Cash, Annual Accounting and margin schemes.
Flat Rate Scheme: who should use it and who shouldn't?
The Flat Rate Scheme simplifies VAT and can save money for some businesses but costs others. Here is who it suits and who should avoid it.
How does the VAT Margin Scheme work for buying second-hand sneakers from private sellers?
The VAT Margin Scheme lets resellers pay VAT only on their profit margin, not the full sale price, when buying second-hand sneakers from private sellers.
Reclaiming VAT (Input Tax)
What input VAT you can and cannot reclaim: vehicles, the home office, entertainment, and pre-registration costs.
Can I reclaim VAT on pre-registration expenses?
You can often reclaim VAT on goods and services bought before you registered, within strict time limits. Here is what qualifies and how to claim it.
Can I reclaim VAT on purchases made before I registered for VAT?
Reclaiming VAT on purchases made before you registered turns on one test: is each item still on hand and usable at your EDR?
Can I reclaim VAT on a company car?
Input tax on a company car is blocked by default. Recovery needs exclusive business use with no private availability, or a qualifying purpose like taxi work.
Imports, Exports & Brexit
Trading goods across borders after Brexit: imports, exports, postponed VAT accounting and customs.
Property & Construction
VAT on land and buildings: the option to tax, renovations and conversions, and selling or letting property.
When should I opt to tax a property?
Opting to tax turns an exempt property supply into a taxable one so you can recover VAT. Here is when it makes sense and what it commits you to.
Can I claim VAT back on renovating / refurbishing residential property?
If you renovate to let, no: residential lettings are exempt. But empty-home and non-residential conversions can unlock the 5% rate or full VAT recovery.
Should I opt to tax the property I have purchased?
Not always: if you use the property for a taxable trade you can reclaim VAT without opting. Opting matters when you rent or resell, and locks in for 20 years.
Penalties, Compliance & HMRC
Staying on the right side of HMRC: the penalty points system, late-payment penalties, and what happens in a VAT check.
How does the new VAT penalty points system work?
HMRC's points-based penalty system changed how late returns and payments are penalised. Here is how the points and the late-payment charges actually work.
What is the penalty if I pay my VAT late?
If your VAT payment is over 15 days late, HMRC charges 3% at day 15, 3% at day 30, then 10% a year from day 31. Time to Pay before day 15 stops the clock.
What counts as a 'reasonable excuse' for a late VAT return?
A reasonable excuse is something beyond your control that stopped you filing on time despite reasonable care. Here is how HMRC and the tribunal decide.
Can I appeal a VAT penalty?
Every VAT penalty carries a right of appeal. You have 30 days to request a free internal review or go straight to the First-tier Tribunal.
What happens during an HMRC VAT inspection?
An HMRC VAT inspection is a compliance check on your VAT records and business activity. Here is the full process, from the first letter to the visit itself.
How far back can HMRC investigate my VAT?
HMRC can generally assess VAT up to four years after the period with the error, or up to twenty years where the behaviour was deliberate.
How can I dispute / appeal a VAT decision from HMRC?
You have 30 days from the decision letter to accept HMRC's offer of a free internal review or appeal to the First-tier Tribunal.
Niche / Edge cases
The unusual cases: partial exemption, agent versus principal, deposits, and other edge cases.
How does VAT work if a VAT-exempt band plays at a VAT-registered venue?
A band that charges no VAT is usually below the £90,000 threshold, not exempt. The venue still charges VAT on tickets; cultural exemption depends on the venue.
How does VAT work for non-refundable deposits (the 2019 rules)?
Since 1 March 2019, VAT stays due on a deposit the customer forfeits by cancelling or not showing. Genuine security deposits stay outside VAT.