What happens if you go over the VAT registration threshold?

The test is rolling taxable turnover

You must monitor taxable supplies in the last 12 months, not just the tax year. The current threshold is published on GOV.UK and has been £90,000 in recent years — confirm the figure that applies on the day you check, because Budgets change it.

Exempt supplies and some non-business income do not count in the same way. Most trading sales do. If you have already passed the limit, you normally need to register within the statutory deadline from the end of the month you exceeded it.

Late registration is backdated

HMRC will usually register you from the date you should have been registered. You may owe output VAT on past sales even if you never charged it. You may also reclaim some input VAT, which can offset part of the bill — but only with invoices that meet the rules.

Telling customers months later that you ‘should have added VAT’ is commercially ugly. Some businesses absorb the VAT. That is a cash hit. Do not ignore the registration in the hope the numbers average down.

• Keep a 12-month turnover tracker, updated monthly.
• Apply as soon as the test is met — not at year end.
• If you are already late, treat it as a disclosure of the correct date, not a fresh voluntary application.

After you are registered

You charge VAT, file returns under Making Tax Digital for VAT, and keep digital records. You can still choose voluntary registration before you hit the limit if the commercial case is there.

Solaratax can calculate the historic VAT, register the business and put compatible software in place. Call us if you think you crossed the line last year and have not told HMRC yet.

Questions we are asked

Does the threshold include VAT?

The test is on taxable turnover according to VAT rules. Do not add VAT on top of VAT-exclusive sales, and do not ignore cash that should have included VAT.

Can I deregister if sales fall again?

Yes, if you are below the deregistration threshold and you apply. Output VAT on remaining goods can still arise. Plan the exit.

Are worldwide Amazon sales included?

UK VAT on goods and the place-of-supply rules are specific. Many marketplace sellers have a UK registration even when some sales are treated as outside the UK. Get a proper review, not a forum rule of thumb.