The VAT threshold is the level of taxable turnover at which a business must register for VAT, and per gov.uk it is £90,000 over the last twelve months, or expected in the next thirty days alone. It is the same figure for a limited company, a sole trader or a partnership, so the ltd company vat threshold and the limited company vat threshold that directors search for are the same £90,000 as everyone else's, and the vat threshold 2025 was the same figure, unchanged since it rose from £85,000 in April 2024. This page sets out what the threshold is measured on, how the rolling test works, what happens in the month it is crossed, and what registering does to a company's prices and paperwork, with the flat rate scheme as the version most small companies end up on.
What is vat threshold: the figure and the two tests
Per gov.uk you must register if your total taxable turnover for the last twelve months goes over £90,000, or if you expect it to go over £90,000 in the next thirty days alone. The first is a rolling test, checked at the end of every month against the twelve months just ended, not the financial year; the second catches a single large contract. A business below both can register voluntarily, and one that only sells exempt or out of scope goods and services does not have to register however large its turnover.
Taxable turnover, and what is in it
Taxable turnover is the total value of everything sold that is not exempt or out of scope, per gov.uk, and it includes zero-rated and reduced-rated sales as well as standard-rated ones, goods hired or loaned, business goods used privately, goods bartered or given away, services bought from abroad under the reverse charge, and building work over £100,000 a business did for itself. It does not include exempt sales such as most insurance and financial services, or sales outside the scope of UK VAT. A consultancy company's taxable turnover is usually its whole fee income, which is why the threshold arrives quickly.
The month you cross it
The registration date is the first day of the second month after the month in which the rolling total went over £90,000, and the application has to be made within thirty days of the end of the month it was crossed. A company that expects to cross it in the next thirty days registers from the date it formed that expectation. Late registration means VAT is due on sales from the date the company should have registered, whether or not it was charged to the customer, plus a penalty, which is the subject of the VAT registration page on this site.
What registering does to a limited company
The company charges VAT on its taxable sales, reclaims VAT on its purchases, files a return each quarter under Making Tax Digital and pays the difference. For a company selling to VAT-registered businesses that is cost neutral; for one selling to the public it is a 20 percent price rise or a margin cut. The Flat Rate Scheme, open to businesses with VAT turnover of £150,000 or less per gov.uk, replaces the reclaim with a fixed percentage of turnover paid over and suits a company with few purchases. The corporation tax computation is unaffected: VAT is not the company's income or cost when registered.
Questions people ask about vat threshold 2026
Is the vat registered threshold the same for a limited company?
Yes. £90,000 of taxable turnover over twelve months applies to every business, per gov.uk. There is no separate ltd company vat threshold; the company's legal form does not change the figure.
What was the vat threshold 2025?
£90,000, the same as for 2026. The threshold rose from £85,000 to £90,000 on 1 April 2024 and has been held there since, so a company that measured itself against £85,000 in an old year should use £90,000 now.
Can I stay under the threshold by splitting the business?
Not artificially. HMRC can direct that businesses split to avoid registration are treated as one, and a company and a sole trade run by the same person selling the same thing is the classic case. Genuinely separate businesses with separate customers, staff and premises are a different matter and one for an adviser.