What Is the VAT Threshold?

VAT is a type of sales tax in England.

Value Added Tax (VAT) is a consumption tax paid on taxable goods and services in the United Kingdom. If your business sells taxable goods or provides taxable services, then you may have to register for VAT.

Requirements

If your business turnover for the previous 12 months is above £70,000, then you must register for VAT with Her Majesty's Revenue and Customs (HMRC). A turnover is the amount of sales your business makes.

Penalties

If you register late for VAT, then you may be subject to a penalty. Check your turnover periodically to determine if the VAT threshold applies. Also check the current registration threshold to make sure it hasn't changed.

Exceptions

The VAT threshold does not apply if you supply or deliver goods from another country that are subject to UK Excise Duty, like tobacco and alcohol. In other words, your must register for VAT regardless of your turnover.

References

• HMRC: When to Register for VAT

Resources

• HMRC: VAT