When must you become VAT registered? | Will the VAT threshold go up in 2025?

Understanding the VAT registration threshold 2025 is essential for UK businesses navigating tax compliance. In 2025, the threshold remains at £90,000 in taxable turnover over a rolling 12-month period, meaning businesses must register for VAT if they exceed this limit or expect to do so within 30 days. Staying informed about when and how to register can help small businesses avoid penalties and manage their VAT obligations efficiently.

What is the current VAT threshold?

The taxable turnover threshold for VAT registration is currently £90,000 and has applied since April 2024. This will continue to be the case for 2025.

When do I need to register for VAT?

Businesses must register for VAT if they meet one of the following conditions:
• At the end of any month, the value of taxable supplies made in the past 12 months exceeds the £90,000 threshold; or
• At any point, there are reasonable grounds to believe that the value of taxable supplies in the next 30 days will exceed the £90,000 threshold.

For condition 1, HMRC provides the following illustrative example. On 15 July your total taxable turnover for the last 12 months is £100,000. That’s the first time it has gone over the VAT threshold. You must register by 30 August. Your effective date of registration is 1 September.

For condition 2, HMRC provides the following illustrative example. On 1 May, you arrange a £100,000 contract to provide services. You’ll be paid at the end of May. You must submit your VAT registration application by 30 May. Your effective date of registration will be 1 May.

Are there other reasons I would need to register for VAT?

Additionally, businesses without a physical presence in the UK may still be required to register for VAT if they supply goods or services to the UK or expect to do so in the next 30 days.

Contact us.

If your business needs support with VAT and bookkeeping, contact our specialist business outsourcing team today. We will ensure your business complies with the VAT registration threshold 2025 requirements and VAT legislation, alongside maintaining robust accounting records to help with planning and growth.