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By Understanding VAT (Value Added Tax) obligations is essential for every business operating in the UK. At TT Accountancy, we help London-based businesses navigate VAT registration rules, stay compliant with HMRC requirements, and avoid penalties. In this guide, we break down VAT registration thresholds, rules, and how to determine if your business needs to register.
What is VAT?
VAT is a tax levied on most goods and services sold in the UK. Businesses charge VAT on their sales and can reclaim VAT paid on business-related purchases. This makes understanding VAT rules essential for both compliance and cash flow.
VAT Registration Threshold in 2025
As of 2025, the VAT registration threshold in the UK is £90,000 in taxable turnover over any rolling 12-month period. If your business meets or exceeds this threshold, VAT registration is mandatory.
Compulsory VAT Registration
You must register for VAT if:
- Your taxable turnover exceeds £90,000 in any 12-month period
- You expect to go over the threshold within the next 30 days
- You acquire goods worth more than £85,000 from the EU in a calendar year
Check current VAT thresholds on GOV.UK
Voluntary VAT Registration
Even if your turnover is below the threshold, you can register voluntarily. Benefits include:
- Reclaiming VAT on purchases
- Enhancing your business credibility
- Preparing your business for future growth
Types of VAT Schemes
There are various VAT schemes depending on your business model:
- Standard VAT Accounting – Submit VAT returns quarterly and pay VAT on sales minus VAT on purchases
- Flat Rate Scheme – Pay a fixed percentage of your turnover (suitable for small businesses)
- Annual Accounting Scheme – Submit only one VAT return per year
- Cash Accounting Scheme – Pay VAT when you receive payment from customers
We help you choose the best VAT scheme for your business type and size.
Deadlines and Filing
Once registered, you must:
- Submit quarterly VAT returns (or annually, if under that scheme)
- Keep accurate digital records (in line with Making Tax Digital)
- Pay VAT by the due date to avoid penalties
How TT Accountancy Can Help
VAT compliance can be complex. At TT Accountancy, we:
- Handle VAT registration and scheme selection
- File returns and ensure MTD compliance
- Offer advice on reclaiming input VAT
- Provide tailored VAT planning strategies
👉 Contact TT Accountancy to ensure you’re meeting your VAT obligations and optimising your tax position.
Whether you’re approaching the VAT threshold or planning for future growth, understanding VAT rules is essential. Let TT Accountancy guide you through the registration process and ensure your business remains compliant and efficient.
