VAT registration is a legal requirement for many UK businesses, and understanding when and how to register is critical. Register too late and you face penalties and having to pay VAT to HMRC from your own pocket on past sales. Register at the right time and you may be able to reclaim VAT on your business costs. This step-by-step guide explains exactly how to register for VAT in the UK.
When Do You Need to Register for VAT?
You must register for VAT if your VAT-taxable turnover exceeds £90,000 in any rolling 12-month period (as of April 2024). This is called compulsory VAT registration. You have 30 days from the end of the month in which you exceeded the threshold to register, and you must charge VAT from the start of the following month.
You can also register voluntarily even if your turnover is below £90,000. This can be beneficial if your business has significant VAT-able costs (so you can reclaim input VAT), or if your clients are VAT-registered businesses who don’t mind the added VAT charge.
What’s the VAT Registration Threshold in 2025?
The VAT registration threshold for 2025/26 is £90,000. This was increased from £85,000 in April 2024 — the first increase in seven years. You must monitor your rolling 12-month taxable turnover against this threshold. Note that this is not the same as your annual turnover — it’s calculated as a rolling 12-month figure, not a calendar or tax year figure.
Step-by-Step: How to Register for VAT in the UK
Step 1: Create a Government Gateway Account
If you don’t already have one, you’ll need to set up a Government Gateway account at gov.uk. This is the online portal through which you manage most HMRC registrations and filings. If you already have one (e.g. for self assessment or PAYE), you can use the same account.
Step 2: Apply Online via HMRC
VAT registration is done entirely online. Log in to your Government Gateway account and select “Register for VAT.” You’ll need to provide details about your business, including your turnover, the nature of your business activities, your bank account details, and information about any associated businesses. The registration form typically takes 20–40 minutes to complete.
Step 3: Choose Your VAT Scheme
During registration, you’ll need to decide which VAT scheme you want to use. The main options are Standard VAT accounting, the Cash Accounting Scheme, the Flat Rate Scheme, and the Annual Accounting Scheme. Each has different implications for cash flow, administration, and potentially the amount of VAT you pay. Our VAT Returns service includes scheme selection advice.
Step 4: Receive Your VAT Registration Certificate
HMRC typically processes VAT registrations within 30 working days, though simple applications can be faster. You’ll receive a VAT registration certificate (form VAT4) showing your VAT number, registration date, and your first VAT return period. Keep this safe — you’ll need your VAT number on all invoices.
Step 5: Start Charging VAT
Once registered, you must add VAT to your sales invoices from your registration date (or the date you should have registered if you’re registering retrospectively). The standard VAT rate is 20%. Some goods and services are reduced rated (5%) or zero rated (0%). You’ll also start collecting VAT on your purchases for reclaim.
Step 6: Set Up MTD-Compatible Accounting Software
All VAT-registered businesses must comply with Making Tax Digital (MTD) for VAT, which requires digital record-keeping and electronic submission of VAT returns. You need to be using HMRC-approved software such as Xero, QuickBooks, or FreeAgent. ProKeeper uses Xero and can set this up for you.
Step 7: Submit Your VAT Returns
VAT returns are typically submitted quarterly. Your return covers all the VAT you’ve charged on sales (output VAT) minus all the VAT you can reclaim on purchases (input VAT). The net amount is what you pay to (or reclaim from) HMRC. Returns must be submitted and paid within one calendar month and seven days of the end of each VAT period.
Can ProKeeper Register Me for VAT?
Yes. As an HMRC authorised agent, ProKeeper can handle your VAT registration on your behalf, advise on the best VAT scheme for your business, set up your MTD-compatible software, and manage your ongoing quarterly VAT returns. Many clients find this eliminates the stress and risk of managing VAT themselves. See our VAT Returns service for full details.
What Happens If You Register Late?
Registering for VAT late is a common mistake — and an expensive one. If HMRC finds that you should have been VAT-registered earlier, you’ll have to pay all the VAT that should have been collected on past sales, even if you didn’t charge it to customers. You’ll also face a civil penalty of between 0% and 15% of the VAT due, depending on how long you were late and whether you disclosed the issue voluntarily. Always register as soon as you hit the threshold.
Should You Register for VAT Voluntarily?
Voluntary VAT registration makes sense if your customers are mainly VAT-registered businesses (who can reclaim the VAT you charge, so it doesn’t affect them), and you have significant VAT-able business costs that you’d like to reclaim. It can make your business appear more established, too. However, if most of your customers are consumers (who can’t reclaim VAT), voluntary registration means your prices increase by 20% unless you absorb the VAT — which dents your margins. The decision depends on your specific situation.
Ready to register for VAT or need help managing your VAT returns? Contact ProKeeper for a free consultation — we’ll guide you through the process from start to finish.