VAT registration is triggered by £90,000 of taxable turnover across any rolling 12 months — not your tax year and not the calendar year. That rolling part is what catches founders out: the total can cross the line mid-year while your annual accounts still show you comfortably under.
Here's how the test actually works, and the simple habit that keeps it from surprising you.
How the rolling test works
Take your taxable turnover for the last 12 months. Every month, the oldest month drops off the back and the newest one joins the front. That moving total is what has to stay under £90,000, and it never stops moving.
Your tax year and the calendar year don't come into it. That's where people get caught: a strong autumn on top of a strong spring can push the rolling total over £90,000 in the middle of your year, while the accounts you look at once a year still show you under.
If the total crosses £90,000, you have 30 days from the end of that month to tell HMRC, and you're registered from the first day of the second month after you went over.
For a SaaS or e-commerce business growing quickly, this is the one that sneaks up.
The other trigger: the next 30 days
There's a second way to cross the line, and it can catch a single big deal. If at any point you expect your taxable turnover to go over £90,000 in the next 30 days alone — for example, you sign one large contract — you have to register by the end of that 30-day period, with effect from the date you realised. You don't wait for the rolling total to catch up: one big order can trigger registration on its own, and the effective date can even pre-date the sale.
What happens if you miss it
Cross the threshold and you have to register, and quickly. Miss the date, and HMRC registers you from the point you should have registered. The VAT on every sale since then comes out of your own pocket — you never charged your customers that 20%, and going back to ask for it after the fact is hard. Penalties come on top.
The habit that prevents it
The fix is dull (which is good news): check your rolling 12-month total once a month. Add up the last 12 months of taxable turnover, see how close it is to £90,000, and you'll see the line coming with time to plan for it rather than discovering it at your year-end.
Frequently asked questions
What is the VAT registration threshold? £90,000 of taxable turnover, measured over any rolling 12-month period — not the tax year or the calendar year.
How is the £90k threshold measured? On a rolling basis: each month the oldest month drops off and the newest joins, so the 12-month total is always moving. You register when that total crosses £90,000.
What happens if I register late? HMRC registers you from the date you should have registered, so you owe the VAT on sales since then out of your own pocket, plus penalties. Checking your rolling total monthly is how you avoid it.
Can a single contract make me register for VAT? Yes. Under the forward-looking test, if you expect to go over £90,000 in the next 30 days alone — for instance from one large contract — you must register by the end of that 30-day period, with effect from the date you realised.
Work with us
Keeping an eye on your VAT position — and getting registered smoothly when the time comes — is part of what we do for growing founders. Book a call with Carr Accounting Studio.
General information, not advice. UK figures 2026/27 — they change, and your situation may differ. Written by David Carr, chartered accountant and founder of Carr Accounting Studio.