What is the VAT threshold?
The VAT registration threshold for the 2020/21 tax year is £85,000. That means that if your business’s turnover for any rolling 12 month period exceeds £85,000, you’ll need to register for VAT. This doesn’t have to be a calendar year — the 12 month period could run from the start of October to the end of September, for instance.
The threshold applies to the taxable turnover of your business, not the profit. Taxable turnover is the total value of everything that you sell (that’s liable for VAT), including zero-rated products and services. Items that are VAT exempt are not included.
If you think it might benefit your business, you can register for VAT even if your turnover is below the VAT threshold.
