UK VAT Threshold 2026: Registration Limits, Recent Changes, and How They Compare Globally

Quick Answer

The UK VAT registration threshold for 2026 is £90,000 of taxable turnover in any rolling 12-month period. Cross it and you must register for VAT with HMRC within 30 days. The deregistration threshold sits £2,000 lower at £88,000. Both figures have been unchanged since 1 April 2024. Non-UK sellers — including US Amazon FBA businesses storing stock in UK warehouses — face a different rule entirely: the threshold is zero, and registration is required from the first sale.

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What Is the VAT Registration Threshold?

The VAT registration threshold is the amount of taxable turnover a business can earn in a rolling 12-month period before it is legally required to register for VAT with HMRC.

“Taxable turnover” means the total value of everything you sell that isn’t VAT-exempt — including standard-rated, reduced-rated, and zero-rated supplies. It does not include exempt sales (such as certain insurance, financial services, or rent on residential property) or sales that fall outside the scope of UK VAT.

Once a UK-resident business crosses the threshold, it must register, start charging VAT on taxable supplies, file VAT returns (typically quarterly), and remit collected VAT to HMRC. The threshold applies to UK-established businesses. Non-resident sellers face a different rule entirely — covered later in this guide.

The Current UK VAT Threshold (2026)

These figures are published and maintained by HMRC — see gov.uk: VAT thresholds for the official source.

The registration threshold is the figure most businesses focus on. The deregistration threshold — set at £2,000 below the registration figure — allows businesses whose turnover falls back below this level to apply to leave the VAT system if they choose. We cover deregistration mechanics in detail in our separate guide on when and how to deregister for VAT.

What Changed in April 2024 — and What Hasn’t Since

On 1 April 2024, the UK VAT registration threshold rose from £85,000 to £90,000. The deregistration threshold rose in parallel from £83,000 to £88,000. This was the first increase since April 2017, ending a seven-year freeze that had quietly pushed thousands of small businesses into mandatory registration through inflation alone.

Since the 2024 increase:

• The October 2024 Autumn Budget left the threshold unchanged
• The Spring Statement 2025 made no adjustment
• As of the most recent fiscal events, the threshold remains at £90,000 for the 2026/27 tax year

Planning around the current figure: Search interest in queries like “is the VAT threshold changing” suggests businesses expect another move. Periodic proposals have circulated, but no further increase has been legislated. Businesses near the threshold should plan around £90,000, not anticipated changes.

When Does Mandatory VAT Registration Kick In?

HMRC applies two separate tests, and you cross the threshold the moment either is satisfied. The official HMRC guidance on both tests is on gov.uk: Register for VAT.

Test 1: The rolling 12-month test (backwards-looking)

At the end of every month, you check your taxable turnover for the previous 12 months. If it has exceeded £90,000, you must register for VAT.

The 12-month window rolls forward each month — it isn’t tied to your accounting year or the tax year. A business that has a quiet first quarter followed by a strong summer can find itself crossing the threshold in August even though its calendar-year turnover is well below £90,000.

Deadline: You must notify HMRC within 30 days of the end of the month in which you crossed the threshold. Your effective registration date is the first day of the second month after the month in which you crossed the threshold.

Worked example: On 15 July, your rolling 12-month turnover hits £92,000. You must notify HMRC by 30 August. Your effective registration date is 1 September — and you must start charging VAT on every taxable supply from that date.

For the underlying mechanics of getting an HMRC VAT number after you register, see our guide on registering for VAT in the UK.

Test 2: The 30-day forward test (forward-looking)

If you reasonably expect your taxable turnover in the next 30 days alone to exceed £90,000, you must register immediately.

This test is most often triggered by large one-off contracts, sudden marketplace traffic spikes, or a single high-value sale that pushes anticipated turnover past the threshold within the month. Unlike the rolling test, there’s no grace period — the obligation begins the moment your expectation crystallises.Deadline: Notify HMRC within 30 days. Your effective registration date is the date you formed the expectation

Common mistakes when measuring turnover

Voluntary VAT Registration: When It Makes Sense

Businesses below the threshold can register voluntarily. There’s no minimum turnover required, but there are clear cases where voluntary registration pays off — and clear cases where it costs.

✅When voluntary registration usually makes sense

• Your customers are VAT-registered businesses. They reclaim the VAT you charge, so your prices don’t go up in their eyes.
• You incur significant input VAT. Startups investing in equipment, software, or stock can recover the VAT they pay.
• You’re approaching the threshold. Better to register on your own terms than under deadline pressure.
• You sell to enterprise or international buyers. A VAT number on invoices signals credibility.

❌When voluntary registration usually doesn’t make sense

• Most of your customers are individual consumers who can’t reclaim VAT. Adding 20% to your prices typically reduces sales.
• Your input VAT is low — typical for a service business with few overheads.
• You don’t have systems for accurate quarterly returns. Late or incorrect returns generate penalties whether registration was mandatory or voluntary.

If you’re weighing this decision, our team handles voluntary and mandatory registrations the same way — see our VAT registration service for what’s involved.

Deregistration: When You Can Leave the VAT System

If your turnover falls below £88,000 and you reasonably expect it to stay there for the next 12 months, you can apply to deregister. Deregistration is voluntary — there’s no obligation to leave the system just because you’ve slipped below the threshold.

We cover the timing, evidence requirements, and ongoing obligations after deregistration in our separate guide: when and how to deregister for VAT.

How the UK VAT Threshold Compares to the EU

The UK’s £90,000 registration threshold is one of the highest in Europe. Here’s how a selection of EU member states handle the equivalent threshold for resident businesses as of 2026:

Note: Figures are indicative for 2026. Country rules vary by sector, scheme, and entity type. Confirm with a specialist before relying on any single figure — detailed country guides are linked in the table where available.

The headline pattern: the UK’s threshold is comparatively generous for resident businesses. But two structural differences make this comparison less helpful than it looks at first glance.

The €10,000 distance selling threshold (and OSS)

If you sell goods or certain digital services business-to-consumer across EU borders, a separate EU-wide threshold applies: €10,000 of cross-border B2C sales per calendar year, calculated across all EU destination countries combined. Cross this and you must either:

1. Register for VAT in every destination country where you sell, or
2. Register for the One Stop Shop (OSS) scheme, which lets you file a single return covering all your EU sales — with the VAT then distributed to each member state by the tax authority. The European Commission’s official overview is on europa.eu: One Stop Shop.

For most cross-border sellers, OSS is the practical answer. We cover the mechanics, the difference between OSS and IOSS (for imports under €150), and when each applies in our guide on OSS vs IOSS.

Non-resident sellers: there is no threshold

This is the most consequential point for any business outside the UK selling into the UK — or any non-EU business selling into an EU member state.

For non-resident sellers, the registration threshold is zero. If your business has no UK establishment and you make taxable supplies in the UK — for example, you sell goods from inventory stored in a UK warehouse — you must register for UK VAT from the first sale, not after £90,000.

The same principle applies across most of the EU: non-resident sellers typically have no domestic threshold and must register from first sale in any member state where they have a taxable presence (often triggered by holding stock locally).

What This Means for US Sellers Entering the UK or EU

This zero-threshold rule is the single biggest VAT surprise for US-based sellers — particularly Amazon FBA sellers — entering the UK or EU market for the first time.

The pattern we see repeatedly:

1. A US seller assumes the £90,000 UK threshold (or the EU equivalent) applies to them
2. They start selling on Amazon UK or Amazon EU using FBA, with Amazon moving their stock into a UK or EU fulfilment centre
3. The moment that stock lands in a UK or EU warehouse, the seller has created a taxable presence — and the threshold no longer applies
4. They should have registered for VAT before the first sale, not after the threshold

The consequences include retrospective VAT liability on every sale, late-registration penalties, and — increasingly common — Amazon Seller Central suspensions when the marketplace’s own compliance checks flag the gap.

For US sellers, VAT is only one part of the picture. The full compliance stack typically includes:

• VAT registration in the UK and any EU country where stock is held — covered by our VAT registration service
• EPR (Extended Producer Responsibility) obligations for many product categories — see our EPR guide for UK e-commerce sellers
• Customs clearance for goods entering UK and EU markets — covered on our customs, imports and exports service page
• Postponed VAT accounting (PVA) for non-resident importers managing UK import VAT cashflow — see our guide to postponed VAT accounting

The right time to look at VAT registration is before stock leaves the US, not after sales start. Retrospective registration costs significantly more — both in penalties and in cashflow strain — than getting it right upfront.

Penalties for Late VAT Registration

If you miss the registration deadline, HMRC applies a “failure to notify” penalty as a percentage of the VAT that should have been paid between the date registration was required and the date HMRC was actually notified. The penalty regime is set out in HMRC’s Compliance checks: penalties for failure to notify (CC/FS11) factsheet.

The penalty scale depends on how late the notification is and whether the disclosure was prompted or unprompted:

In addition to the penalty, HMRC will assess the VAT itself for the entire period — meaning a seller who should have registered 18 months ago and only realises now will owe both the back VAT and a penalty calculated on that back VAT. The numbers compound quickly.If you suspect you’ve crossed the threshold without registering, voluntary unprompted disclosure to HMRC will minimise the penalty significantly compared to waiting for HMRC to find you first.