VAT Registration Threshold 2026: What Changed and When You Must Register

The VAT registration threshold remains at 90,000 GBP for 2026/27. We explain who needs to register, how to choose MTD-compatible VAT software, and the penalties for late registration.

VAT thresholds for 2026/27

The VAT registration threshold for 2026/27 remains at 90,000 GBP — unchanged from 2026/27. Businesses whose taxable turnover exceeds this threshold in any rolling 12-month period must register for VAT within 30 days.

The deregistration threshold is 88,000 GBP. If your turnover falls below this, you can apply to deregister.

MTD for VAT: what you must do when you register

All VAT-registered businesses must use MTD-compatible software to submit VAT returns. When you register for VAT, you must choose HMRC-recognised software, keep digital VAT records from the date of registration, and submit VAT returns digitally through your software.

QuickBooks, Xero, Sage, and FreeAgent are all HMRC-recognised for MTD VAT. See our full comparison to choose the right one for your business.

Penalties for late VAT registration

HMRC can charge a penalty of between 5% and 15% of the VAT due from the date you should have registered. Late registration penalties are calculated on the VAT that would have been due from the date you should have registered to the date HMRC was notified. This can result in a significant unexpected tax bill.

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