Does my company need to be VAT registered?

A company is required to register for VAT if its turnover for the previous 12 months is above £82,000. This is known as the VAT registration threshold. It is compulsory to register either when you reach the threshold or if you know that you will. The VAT registration threshold is based on your company’s VAT taxable turnover (the total of your sales that aren’t VAT exempt).

You must register for VAT if:

  • Over a 12 month period your VAT taxable turnover reaches or exceeds £82,000
  • Your company sells goods into the UK from another country in the EU that exceed the 'distance selling threshold' of £82,000
  • Your company has acquired goods from other countries in the EU totalling more than £82,000 in a year.
  • You believe that your business turnover may go over the £82,000 threshold in the next 30 days or you take over a VAT registered business as a going concern.

What happens if I am late to register?

The law clearly states that you must register within 30 days of your company’s turnover exceeding the threshold, if a company registers late, you must pay what you owe from when you should have registered. Depending on how late the registration is and on how much you owe, you may incur a penalty.


A company can apply for a registration exception if its taxable turnover only temporarily exceeds the threshold. In order to do this, you would need to write to HMRC and provide evidence of why you believe that your taxable turnover will not exceed the threshold over the next 12 months.

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