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VAT

VAT is the UK's tax on most goods and services. If your turnover is below the registration threshold, you can usually ignore it — but once you cross the line, or choose to register voluntarily, you'll need to charge VAT on your sales, file returns, and pay HMRC. These guides cover the lifecycle: when to register, how to file, what you can reclaim, and how to deregister when the time comes.

Jump to 5 guides 8 key facts Annual cycle Reviewed by qualified accountants

Guides

Read our VAT guides

Plain-English walkthroughs of the most common questions clients ask.

Key facts

The headline figures

£90,000

Registration threshold

Taxable turnover in any rolling 12-month period (2025/26)

£88,000

Deregistration threshold

If turnover drops below this, you can leave VAT (2025/26)

20%

Standard rate

Applies to most goods and services

5%

Reduced rate

Domestic fuel, children's car seats, some others

0%

Zero rate

Most food, books, children's clothes, exports

Required

MTD for VAT

All VAT-registered businesses must use compatible software

Quarterly

Return frequency

Annual scheme available for some businesses

1 month + 7 days

Return + payment due

After the end of each VAT quarter

Annual cycle

Key dates and deadlines

The events you can't afford to miss in a typical year.

  1. Day 1 of VAT quarter

    VAT period begins

    You charge VAT on sales and track VAT on purchases throughout the quarter.

  2. Last day of quarter

    VAT period ends

    Total up your output VAT (sales) and input VAT (purchases). Net = what you owe HMRC.

  3. +1 month and 7 days

    VAT return + payment due

    Submit your return via MTD-compatible software. Direct Debit takes the payment automatically a few days later.

  4. Anytime turnover hits £90k

    Must register within 30 days

    If your taxable turnover in any rolling 12-month period exceeds the threshold, you have 30 days to register.

  5. Anytime turnover drops below £88k

    Can deregister

    You don't have to deregister, but if your turnover has fallen and is expected to stay below the threshold for the next 12 months, you can.

Useful resources

Official tools and references

Quick answers

VAT FAQs

Should I register voluntarily even if I'm under the threshold?
Sometimes yes. If your customers are themselves VAT-registered (they can reclaim what you charge), and you have significant VAT-bearing costs, voluntary registration can put real money back in your pocket. It can also make a young business look more established. The downside: more admin and 20% on top of your prices for non-VAT customers.
What's the Flat Rate Scheme and is it worth using?
A simplified scheme for small businesses where you pay a fixed % of gross turnover (depending on industry) instead of accounting for input VAT in detail. It's often less generous than standard accounting now (especially for 'limited cost' businesses) — your accountant can model both and recommend.
Can I reclaim VAT on things bought before I was registered?
Yes — generally goods bought up to 4 years before registration that you still have on hand, and services bought up to 6 months before. You reclaim them on your first VAT return.
What is MTD for VAT?
Making Tax Digital — every VAT-registered business must keep digital records and file returns through MTD-compatible software. You can't just type figures into HMRC's website any more. Tools like FreeAgent, Xero, QuickBooks and many others handle this.
How do I deal with VAT on imports / exports?
Exports to outside the UK are usually zero-rated. Imports from outside the UK now use postponed VAT accounting — VAT is recorded on your return rather than paid at the border. Your accountant should handle the mechanics, especially since Brexit changed how EU trade works.

Need help with vat?

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Our team specialises in vat for UK small businesses, contractors and landlords. No obligation, no sales pitch — just a clear answer to your specific situation.

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