VAT (Value Added Tax)
What it is
A consumption tax charged on most goods and services in the UK, currently at a standard rate of 20%. UK businesses with taxable turnover above £90,000 must register. Non-resident businesses selling digital services to UK consumers must register from the first sale, with no threshold.
Why it matters
Missing the registration threshold means HMRC charges VAT on all sales back to when you should have registered, plus a late-registration penalty. Non-resident directors selling digital services have no £90k buffer — obligation starts immediately.
Common mistake
Assuming the £90,000 threshold applies to all businesses. If you are a non-UK-established business selling digital services to UK consumers, you must register from sale one regardless of turnover.
Official source
GOV.UK — VAT registration ↗Related
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: June 2026.