How to register for VAT in the UK (2026 guide)

Whether it’s a meal, an umbrella, or a holiday, nearly 20% of everything we buy goes towards VAT, or value-added tax. Why? VAT is a vital source of funding for the UK government’s budget (which in 2025 accounted for 14.7% of funding).

As a consumer, we don’t ordinarily need to pay much attention to VAT – it is a discreet and indirect tax covered in the overall cost of the goods and services we buy. But this responsibility changes once you become a business owner. Now, instead of just paying for VAT, you need to start issuing it to your customers. But how do you go about that?

This guide explains what VAT is, who needs to register, and how to register your business for VAT in 2025/2026.

What is VAT and how does it work in the UK?

Most likely, you will have noticed VAT when you come to pay the bill at a restaurant and find a 20% VAT charge nestled next to the restaurant’s (already substantial) service fee.

This charge doesn’t go towards the business, but towards the government as a form of indirect taxation. Businesses registered for VAT account for its cost when advertising prices of goods and services to the general public (that’s why most of us don’t notice the effect of VAT on the purchases we make day-to-day).

The standard rate of VAT is 20%, but certain goods and services are exempt or partially exempt from VAT, which are charged at 0% and 5%, respectively.

• When should I register for VAT?
• How do I get a company VAT number?
• How does voluntary VAT registration work?

Who needs to register for VAT?

In the UK, a business must register for VAT if:

• Its taxable turnover over the last 12 months exceeds £90,000 (the VAT registration threshold in 2025/2026)
• Its taxable turnover is expected to exceed £90,000 within the next 30 days
• The business owner is based outside the UK and owns a British business
• The business owner is based in the UK, but their business isn’t
• The business supplies any goods or services to the UK or expects to do so in the next 30 days

While some businesses are required to register for VAT, others can voluntarily register for VAT to reclaim some of their taxable income.

In certain circumstances, businesses that exceed the £90,000 VAT registration threshold may apply for an exemption, subject to HMRC approval. For example, if higher turnover results from an exceptional, non‑recurring event and future turnover is expected to fall below the threshold, the business may write to HMRC to request an exemption from VAT registration. Approval is granted at HMRC’s discretion.

Voluntary VAT registration

Businesses can voluntarily register for VAT even if they don’t meet the above criteria; whether they should depends on their particular situation.

For example, if you own a restaurant that purchases goods from a VAT-registered supplier, those supplies will include VAT that you need to pay. However, if you voluntarily registered for VAT, you can reclaim this cost from HMRC.

However, if you are providing a service like financial consultancy whose services are exempt from VAT, it would not make a difference whether you did or didn’t register.

What happens if I don’t register my business for VAT?

If you don’t register your business for VAT but it meets the specific criteria to do so, then HMRC institutes stiff financial penalties against you and your business, the amount depending on the amount of VAT due and how late you were in telling HMRC you should have been registered.

If you registered fewer than 9 months late, a penalty of 5% of the amount of VAT owed is charged to your business. If registration is between 9 and 18 months late, then this rate is 10%. If registration is more than 18 months late, the penalty is 15% of the VAT owed.

You can challenge a VAT registration penalty if it was affected by issues like:

• Bereavement
• Doubt about the liability of supplies, i.e. proven confusion around whether you or the supplier is liable to pay VAT on goods and services
• Uncertainty about your employment status, i.e. proven doubt about self-employment status through correspondence with HMRC
• Serious illness

HMRC may also require you to register for VAT retrospectively. For example, if you should have registered from February 2025, but only became aware in July 2025, HMRC will backdate the registration from February 2025. As a result, your VAT will be due on all sales from February to June 2025, even if VAT was not charged to customers at the time.

This can be a lot more costly than any penalties, so make sure you keep an eye on your revenue.

How to register for VAT in the UK: Step by step

Registering for VAT can seem confusing at first, but we have provided a breakdown here to make the process straightforward.

1. Gather key information for HMRC

Once you have determined whether your business is viable for VAT registration based on the criteria above, you will need to gather the necessary materials to complete your VAT registration process.

Important: What information you’ll need depends on the type of business you own; sole traders register with different requirements compared to a limited company.

Key information for limited companies

If you are seeking to register a limited company for VAT, you will need:

• Your company’s registration number (found using the Companies House public register)
• Your business’s bank account details (found in your bank statements)
• Your Unique Taxpayer Reference (visible in your HMRC personal tax account).
• Details of your annual turnover (determined from your business’s accounting records)
• An estimate of your taxable turnover for the next 12 months (determined from your business accounting forecasts)
• Information from your self-assessment, corporation tax, and Pay As You Earn (Found in your HMRC Business Tax Account)

Key information for individuals or partnerships

To register for VAT as an individual or partnership, you’ll need:

• Your National Insurance number (found on your payslips, P60, or National Insurance card)
• ID, such as a passport or a driving license
• Your bank account details
• Your Unique Taxpayer Reference, if you have one (visible in your HMRC personal tax account)
• Details of your annual turnover (determined from your business’s accounting records)
• An estimate of your taxable turnover for the next 12 months (determined from your business accounting forecasts)
• Information from your Self Assessment return, payslips, and P60 (visible in your HMRC personal tax account)

2. Register for a Government Gateway user ID and password (if you haven’t already)

If you haven’t already received your Government Gateway account details, you must do so before registering your business for VAT. You’ll need this to access your personal tax account, business tax account, and self-assessment return, which all contain the information needed for the registration process.

How to set up a government gateway account

You can acquire your Government Gateway ID and password by:

• Going to the Government Gateway account creation page
• Enter the email address you want to use for your account
• Enter the confirmation code sent to your email
• Enter your name
• Create a password and recovery word

Once you have your Government Gateway account, you can proceed with your business’s VAT registration process.

3. Complete the online VAT application process

Now that you have your government gateway ID and all the necessary information, you can carry out the VAT registration process.

• Head to the VAT online registration portal and click Start Now.
• Input your government gateway ID and access code to proceed with the application.
• Follow the on-screen instructions, which will ask you to:
  • Accept the legal declaration that the information you provide is correct and complete to the best of your knowledge.
  • Answer questions related to the business (practical information, why you are registering, and whether the business meets the VAT registration criteria)
  • Verify the business (registration number, business name)
  • Enter personal information (name, DOB, national insurance number, address, contact details)
  • Business information (email address, activities)
  • VAT registration (takeover projections, type goods and services, registration date, VAT returns, flat rate scheme)
• Double-check you have filled in all the information correctly, and then send off your application.

If you don’t want to register online, you can also register via a paper form sent to you by HMRC. To request a paper form, contact HMRC on 0300 200 3700.

4. Wait for confirmation from HMRC

HMRC will respond to your application within 30 working days. While you’re waiting for a response from HMRC with an answer to your application, you mustn’t jump the gun by charging for VAT on your invoices right away, as you can only do this once you have your official VAT registration number.

Keep detailed and organised records of all sales and purchases made between your Effective Date of Registration and the date you receive the number, so that you can account for VAT on all these transactions once you have your VAT number.

You might wish to increase your prices in anticipation of becoming VAT registered to avoid being out of pocket. However, you cannot issue VAT invoices until your VAT registration has been confirmed, and a VAT number has been provided.

Once you receive confirmation of their VAT registration and VAT number, you can then reissue VAT‑compliant invoices.

Post-registration

HMRC will send you your VAT registration certificate through your online account or by post, depending on the method by which you applied for registration. On it, you will find your 9-digit registration number and your Effective Date of Registration. There are several steps you should take post-registration:

Choose the right VAT accounting scheme

By choosing the right VAT accounting scheme, you can help streamline the process by which you pay the government VAT. There are four main accounting schemes, each with its own distinctive strengths and weaknesses.

Find and use an MTD for VAT-compatible software

When you register your business for VAT, it is automatically enrolled in Making Tax Digital for VAT, a new government initiative that revamps VAT accounting for the digital realm.

As part of this new initiative, you must choose a compatible software package that allows you to keep digital records and submit VAT returns, as well as a bridging software that connects incompatible software to HMRC systems.

You can use the government database to search for compatible software that best suits your needs and those of your business.

Start charging for VAT

Now that you have completed the registration process, received your registration number and Effective Date of Registration, chosen your preferred accounting scheme, and selected the most appropriate software for your MTD, you are now ready to start charging your customers VAT for your business’s goods and services.

You now have a legal obligation to include VAT on all taxable sales that occur after your Effective Date of Registration, and you can also begin to reclaim VAT from your business purchases.

Still need help registering for VAT?

Don’t want to handle VAT admin yourself? Our team can register your business for VAT and handle company secretarial requirements through our Full Company Secretary Service, allowing you to stay compliant while focusing on growth.