VAT returns, thresholds and schemes.
When to register, when to file, when to pay, and which VAT scheme might save you time or money. We handle all of it.
The £90,000 registration threshold
You must register for VAT when your taxable turnover goes over £90,000. The important detail is how that is measured: over any rolling 12 months.
It is a rolling 12 months
The threshold is not tied to the tax year or your financial year. At the end of every month, add up your taxable sales for the last 12 months. The window moves forward each month, so you can cross the line at any time.
Each month the window slides on by one. Total the last 12 months and compare it to £90,000.
When you must register
- Over £90,000 in the last 12 months. You must register within 30 days of the end of the month you went over.
- Expecting to exceed £90,000 in the next 30 days alone. You must register straight away, for example if you win a large contract.
- Taxable turnover includes standard-rated and zero-rated sales. VAT-exempt sales are left out.
- Leaving VAT: you can apply to deregister if your turnover is expected to stay below £88,000.
- Under the threshold? You can still register voluntarily, which lets you reclaim VAT on your costs.
When to file and when to pay
Most businesses file a VAT return every three months, using Making Tax Digital compatible software. The return and the payment are both due on the same date.
- 31 DecemberYour VAT quarter ends
- 31 JanuaryOne month later
- 7 FebruarySeven days on: return filed and payment received by HMRC
- Direct DebitHMRC collects a few working days after the deadline, if you have set one up
Your own VAT quarters may end in different months, such as January, April, July and October, depending on when you registered. The rule is the same: one month and seven days after the period ends. Late returns collect penalty points, and a penalty follows once you reach the limit. Late payments can bring interest and penalties.
VAT schemes you may be eligible for
The standard method suits many businesses, but HMRC offers schemes that can cut paperwork or help cash flow. Which one is best depends on your sales and costs.
Standard accounting
Charge VAT on sales, reclaim VAT on costs, and pay HMRC the difference each quarter. The default, and often best if you have lots of VAT on purchases.
No turnover limit
Flat Rate Scheme
Pay HMRC a fixed percentage of your VAT-inclusive turnover, set by your trade, and keep the difference. Simpler records, but you generally cannot reclaim VAT on purchases. A higher rate applies to limited cost traders.
Join up to £150,000 turnover. Must leave above £230,000.
Cash Accounting
Pay VAT when your customers pay you, not when you invoice. Helpful if customers pay slowly and you want to avoid paying VAT you have not received.
Join up to £1.35m turnover. Must leave above £1.6m.
Annual Accounting
One VAT return a year, with advance payments through the year and a balancing payment at the end. Less admin and steadier budgeting.
Join up to £1.35m turnover. Must leave above £1.6m.
Retail schemes
For shops and other businesses selling to the public, where it is not practical to issue invoices or track the VAT rate on every sale.
Rules vary by scheme
Tour Operators' Margin Scheme
The tourism scheme. For businesses that buy in and resell travel services, such as accommodation and transport, as a principal. VAT is worked out on your margin rather than the full selling price.
For travel and tourism businesses
Margin schemes
For dealers in second-hand goods, antiques, art and similar. VAT is accounted for on the profit margin on each item, rather than the full price.
Conditions apply to the goods
Construction reverse charge
Not an optional scheme, but important if you work in construction. For many CIS jobs between VAT-registered businesses, the customer accounts for the VAT instead of the supplier.
Applies to certain CIS services
Each scheme has its own rules and conditions, and some cannot be combined. We check your figures and tell you which scheme, if any, is worth using. You can also try our Flat Rate Scheme calculator.
VAT handled, start to finish
- Checking whether and when you need to register
- VAT registration with HMRC
- Quarterly returns prepared and filed on time
- Advice on the best VAT scheme for your business
- Making Tax Digital for VAT sorted
Fixed monthly fee
VAT is priced on the work involved. Ask for a quote, and your first 2 months are free with no upfront cost.
VAT questions
Is the VAT threshold based on the tax year?
No. It is based on any rolling 12-month period. You should check your total at the end of every month, not just once a year.
What if I only cross the threshold for one month?
If your last 12 months of taxable turnover go over £90,000, you must register. The only exception is if you can show to HMRC that turnover will fall back below £88,000 over the next 12 months.
Can I choose to file monthly instead of quarterly?
Some businesses do, for example if they regularly reclaim more VAT than they pay. Ask us and we will tell you whether it makes sense for you.
Which VAT scheme is best?
It depends on your turnover, how fast customers pay, and how much VAT you pay on costs. The Flat Rate Scheme is not always cheaper, so we compare it with standard accounting using your numbers.
Do I need special software?
Yes. VAT-registered businesses must keep digital records and file through Making Tax Digital compatible software. We take care of this for you.
This page is general information, not personal tax advice. Thresholds and rules are as at October 2026 and can change. Please speak to us about your own circumstances.