What is the UK VAT registration threshold in 2026?

The statutory UK VAT registration threshold is £90,000 in taxable turnover calculated on a rolling 12-month basis (or if you expect to exceed £90,000 in the next 30 days alone). It is not based on your company's accounting year.

Does the £90,000 VAT threshold apply to non-resident directors?

If your UK company is managed by non-resident directors without a fixed physical establishment in the UK, HMRC may classify the business as a Non-Established Taxable Person (NETP). For NETPs selling taxable goods or digital services directly to UK consumers, the threshold is £0, requiring immediate VAT registration before making UK taxable supplies.

Can a UK company register for VAT voluntarily below the threshold?

Yes. Companies with taxable turnover below £90,000 can register voluntarily to reclaim input VAT paid on business expenses, such as professional fees, software, and stock. However, registration mandates quarterly digital VAT return submissions under Making Tax Digital (MTD).

What happens if a company registers late for UK VAT?

HMRC can charge penalties under the points-based late submission penalty system, as well as late payment penalties and commercial interest running from the date the business should have been registered. Retrospective VAT on sales made during the unregistered period becomes immediately payable.

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HMRCJuly 2026 · 5 min read

UK VAT and your UK company: the £90,000 threshold and what it means for Arab directors

By Ibrahem Almahawe

Key takeaways for Arab directors

1UK VAT registration becomes mandatory once taxable turnover exceeds £90,000 in any rolling 12-month period
2Most small UK companies owned by Gulf directors will not hit this threshold if they trade outside the UK
3Voluntary registration below the threshold is possible, allows VAT recovery on expenses but adds quarterly filing obligations
4Non-Established Taxable Persons (NETPs) may have VAT obligations on digital services to UK consumers regardless of turnover
5Registration is done online via HMRC and can be handled by your accountant as agent

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Frequently asked questions

What is the UK VAT registration threshold in 2026?: The statutory UK VAT registration threshold is £90,000 in taxable turnover calculated on a rolling 12-month basis (or if you expect to exceed £90,000 in the next 30 days alone). It is not based on your company's accounting year.
Does the £90,000 VAT threshold apply to non-resident directors?: If your UK company is managed by non-resident directors without a fixed physical establishment in the UK, HMRC may classify the business as a Non-Established Taxable Person (NETP). For NETPs selling taxable goods or digital services directly to UK consumers, the threshold is £0, requiring immediate VAT registration before making UK taxable supplies.
Can a UK company register for VAT voluntarily below the threshold?: Yes. Companies with taxable turnover below £90,000 can register voluntarily to reclaim input VAT paid on business expenses, such as professional fees, software, and stock. However, registration mandates quarterly digital VAT return submissions under Making Tax Digital (MTD).
What happens if a company registers late for UK VAT?: HMRC can charge penalties under the points-based late submission penalty system, as well as late payment penalties and commercial interest running from the date the business should have been registered. Retrospective VAT on sales made during the unregistered period becomes immediately payable.

Fileminder’s take, written for Arab UK company directors

From 1 April 2024, the UK VAT registration threshold increased from £85,000 to £90,000. This means that if your UK company's taxable turnover exceeds £90,000 in any rolling 12-month period, you are legally required to register for VAT with HMRC. You have 30 days from the point you realise you have exceeded (or are about to exceed) the threshold to register. Registering late carries financial penalties.

The threshold applies to taxable turnover, broadly, sales of goods and services that are subject to UK VAT at the standard rate (20%), reduced rate (5%), or zero rate (0%). Exempt supplies (such as financial services or certain education) do not count toward the threshold. Most Gulf directors running a UK company do not hit £90,000 in UK taxable turnover, particularly if the company's trading is primarily outside the UK. A UK company that solely receives director salary or dividends, or holds UK property for rental, may have specific VAT implications but will rarely trigger mandatory registration.

Voluntary VAT registration is possible below the threshold and has advantages: you can reclaim VAT on business purchases and expenses, and appearing VAT-registered can signal credibility to UK business partners. However it also adds compliance, quarterly VAT returns filed digitally under Making Tax Digital (MTD), and VAT invoicing requirements on every sale.

Non-Established Taxable Persons (NETP): if you run your UK company from outside the UK and have no fixed UK business establishment, HMRC classifies you as an NETP. This matters because NETPs who supply certain digital services to UK consumers may have VAT obligations regardless of turnover level. If your UK company sells digital goods or services to UK individuals, take advice on whether the NETP rules apply before assuming you are below the threshold.

How to register: entirely online via the HMRC VAT registration portal. A UK Government Gateway account is needed. The process takes 10–20 business days once submitted, though VAT numbers can take longer during peak periods. Your UK accountant or corporate service provider can register on your behalf using Agent Services. Fileminder can advise on whether registration is appropriate for your company's specific trading pattern.

Written by

Ibrahem Almahawe

Founder of Fileminder, an AAT Licensed Accountant, and author of the eight-book International Taxation Series. Browse the books →

Reference

HMRC

Visit the source ↗

https://www.gov.uk/vat-registration/when-to-register

Related resources

→UK VAT Threshold & NETP Checker →VAT returns service →Annual accounts service →Company compliance risk evaluation

Disclaimer

General educational guidance only, not legal, tax, accounting, immigration, investment or financial advice. We don't guarantee the information is complete, current or suitable for your situation. Always check official sources (GOV.UK, Companies House, HMRC, the relevant professional body) and speak to a qualified professional before acting. Last reviewed: July 2026.

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