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Are You Over the VAT Threshold? Here’s What You Need to Know


December 3, 2023

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Are you a business owner wondering if you have crossed the VAT threshold? Understanding the VAT thresholds and their implications is crucial for your compliance with the tax laws. In this blog post, we will explore the  VAT thresholds.


The HMRC website provides important information about VAT thresholds, the goods VAT is charged on, and the thresholds for different VAT accounting schemes. Let’s dive deeper into some of the key points discussed in the article.

Registration Thresholds

If your taxable turnover surpasses the registration threshold, you are required to register for VAT. Taxable turnover refers to the total value of all your sales or supplies that are not exempt from VAT. Currently, the registration threshold in the UK is £85,000. However, there are additional thresholds to consider for specific circumstances:

  • Bringing goods into Northern Ireland from the EU (‘acquisitions’): If the value of these acquisitions exceeds £85,000, you must register for VAT.
  • Selling goods from Northern Ireland to consumers in the EU (‘distance selling’): If your total sales across the EU exceed £8,818, you need to register for VAT in EU countries.

On the other hand, if your VAT registered taxable turnover falls below £83,000, you have the option to cancel your VAT registration.

VAT Accounting Scheme Thresholds

Apart from the registration thresholds, there are also specific thresholds for various VAT accounting schemes. The thresholds mentioned are:

  1. Flat Rate Scheme: You can join this scheme if your taxable turnover is £150,000 or less. However, if your turnover exceeds £230,000, you will have to leave the scheme.
  2. Cash Accounting Scheme: Businesses with a taxable turnover of £1.35 million or less can join this scheme. If your turnover surpasses £1.6 million, you must leave the scheme.
  3. Annual Accounting Scheme: You can join this scheme if your taxable turnover is £1.35 million or less, but you must leave if your turnover exceeds £1.6 million.

It is important to note that there are different thresholds for other VAT retail schemes, and you can find more information on this topic on the HMRC website.

Additional Considerations

HMRC’s website also provides information about historical VAT thresholds, which can be useful if you suspect that you should have registered for VAT in previous tax years.

Understanding the VAT thresholds is vital for businesses operating in the UK. If your taxable turnover exceeds the registration threshold of £85,000, it is crucial to register for VAT. Additionally, familiarizing yourself with the thresholds for different VAT accounting schemes can help you determine if any of these schemes are suitable for your business.

Ready to take charge of your VAT registration?

Let Carter Clear Accounting guide you through the complexities of VAT registration, making it a seamless and stress-free experience for your business.

Contact us today to benefit from our expertise in VAT registration. Our team of professionals will ensure that your business is registered correctly and on time, saving you precious time and avoiding potential penalties.

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