Do I really need to register for VAT yet?
Updated 2 June·5 min read
Yes, if…
- ✓Your rolling 12-month turnover is near or over the threshold
- ✓You sell mainly to VAT-registered businesses who reclaim it
- ✓You buy a lot with VAT and want to reclaim input tax
No, if…
- ✕You sell mainly to consumers who can't reclaim VAT
- ✕You're comfortably under the threshold
- ✕Adding 20% would lose you price-sensitive customers
The reasoning
VAT registration is about turnover, not profit. The number that matters is your VAT-taxable sales over the last 12 months on a rolling basis - checked every month, not once a year.
Voluntary registration can pay off if your buyers reclaim VAT and you have VAT-heavy costs. For a consumer-facing shop, it usually just makes you 20% pricier or 20% poorer.
If you cross the line, register within 30 days. Late registration means paying the VAT you should have charged - out of your own pocket.
What’s new on this question
2 Jun 2026HMRC confirms the new online VAT portal slips to October
19 May 2026Registration threshold held for another year in the spring statement
3 Apr 2026Making Tax Digital for VAT guidance updated for sole traders
What you can do this week
- ✓Add up your VAT-taxable sales for the last 12 months
- ✓Set a monthly reminder to recheck the rolling total
- ✓If you're within 10% of the threshold, get an hour with an accountant
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Luca Bonura
Founder & Editor
Self-taught marketer who started selling online at 17 and went on to freelance for brands across Europe before founding Adlarion. He writes The Small Business Digest in plain English - the news he wishes he'd had when he was starting out.
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