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Taxation (UK) · The VAT registration requirements

Compulsory VAT Registration Threshold for ACCA TX-UK

Updated 11 October 2026 · Fact-checked

You must register for VAT when taxable turnover exceeds the registration limit of £90,000. Apply two tests: the historic test looks back over the last 12 months, and the forward look test looks at the next 30 days alone. Notify HMRC within 30 days of the trigger, or earlier for the forward look test.

Understand Compulsory VAT Registration Threshold

VAT is charged on taxable supplies made by a taxable person. A business becomes a taxable person once its taxable turnover passes the registration limit. For TX-UK in this session, the limit is £90,000 and the deregistration limit is £88,000.

Taxable turnover is the value of supplies that are standard-rated, reduced-rated or zero-rated. Exempt supplies and supplies outside the scope of VAT are not included. This is the most common trap, so read the scenario carefully for exempt income.

There are two tests for compulsory registration. The historic test asks whether taxable turnover for the period of 12 months ending at the end of any month (or the period since the business started, if shorter) has exceeded £90,000. The test is done at the end of every month. It is a rolling test, not a test of the tax year or the accounting year.

The forward look test asks whether you expect taxable turnover in the next 30 days alone to exceed £90,000. It catches a business that suddenly wins a large contract. It is looked at on a single day, not month-ends.

If either test is met, you must notify HMRC. Registration is then effective from a date set by the rules below. After that date you charge output VAT and can reclaim input VAT.

Key rules to remember

Registration limit
Register if taxable turnover > £90,000
The limit is exceeded only if turnover is above £90,000. Exactly £90,000 does not trigger registration.
Historic test
Taxable turnover for the last 12 months (or since start, if shorter) > £90,000 at the end of any month
Apply at each month-end. Notify HMRC within 30 days of the end of the month in which the limit was exceeded.
Historic test: effective date of registration
Registered from the first day of the month 2 months after the month in which the limit was exceeded
Unless HMRC agrees an earlier date. Example: limit exceeded in March, registered from 1 May. The notification deadline is 30 days after the end of March.
Forward look test
Expected taxable turnover in the next 30 days > £90,000
Notify HMRC by the end of the 30 days. Registration is effective from the date you realise this, being the start of the 30-day period.
Deregistration limit
Can deregister if taxable turnover in the next 12 months is expected to be £88,000 or less
Included only to contrast with the registration limit.

How to solve Compulsory VAT Registration Threshold questions

Use this method for any question asking whether and when a business must register.

  1. 1Identify the taxable turnover. Include standard, reduced and zero-rated supplies. Exclude exempt and out-of-scope supplies, and VAT itself.
  2. 2List turnover month by month so you can build a cumulative total.
  3. 3Apply the historic test: add up turnover from the start (or the latest 12 months) at each month-end until the total exceeds £90,000.
  4. 4Note the month in which the limit is first exceeded.
  5. 5Work out the notification deadline: 30 days after the end of that month.
  6. 6Work out the effective date of registration: the first day of the month after 2 months from that month-end, unless the deadline is met under an earlier date agreed with HMRC.
  7. 7Separately check the forward look test: does a single 30-day period look likely to exceed £90,000? If so, the notification date is the end of that 30-day period and registration is from the day you realise it.
  8. 8State the earlier of the dates if both tests apply, and show your working.

Quickest way: Month-end running total

When to use it: Use for objective test questions giving monthly or quarterly sales and asking for the registration date.

  1. Strike out exempt sales first.
  2. Keep a running total of taxable sales.
  3. Stop at the first month-end where the total is above £90,000.
  4. Deadline: 30 days after that month-end.
  5. Registration date: the first day of the month after the next whole month, i.e. 1st of the month two months after the trigger month.
  6. If a big single contract is mentioned, test the next 30 days on its own.

Common mistakes in Compulsory VAT Registration Threshold

  • Including exempt supplies in taxable turnover.

    Students add all sales shown in the scenario without checking their VAT status.

    Fix: Read the supply types first and exclude exempt and outside-scope income. Zero-rated supplies are included.

  • Testing against the tax year or accounting year instead of a rolling 12 months.

    Other taxes use fixed periods, so students assume VAT does too.

    Fix: Test at the end of every month using the last 12 months, or the period since the start if shorter.

  • Treating the notification date as the date of registration.

    The two dates sound alike.

    Fix: Notification is within 30 days of the month-end. Registration takes effect from the first day of the month two months after the trigger month.

  • Registering when turnover equals £90,000.

    Students misread the limit as 'at least'.

    Fix: The limit must be exceeded. Turnover of exactly £90,000 does not trigger registration.

  • Forgetting the forward look test.

    Students stop once the historic test is not met.

    Fix: Always check whether a single 30-day period is expected to exceed £90,000, especially when a large order is mentioned.

  • Confusing the registration limit with the deregistration limit.

    Both figures are close: £90,000 and £88,000.

    Fix: Use £90,000 for registering and £88,000 for deregistering.

Worked examples

Example 1

Priya starts trading on 1 January. Her monthly taxable sales are £12,000 for January to March, then £10,000 a month from April. She also has exempt sales of £3,000 a month throughout. When must she notify HMRC, and from when is she registered?

Show the solution
  1. Exclude exempt sales. Only taxable sales count.
  2. Cumulative taxable turnover: January £12,000, February £24,000, March £36,000.
  3. April £46,000, May £56,000, June £66,000, July £76,000, August £86,000.
  4. September £96,000. This is the first month-end above £90,000.
  5. Notification deadline: 30 days after 30 September, which is 30 October.
  6. Registration date: the first day of the month two months after September, which is 1 November.
  7. The forward look test is not met because no 30-day period is expected to exceed £90,000.

Answer: Priya exceeds the limit in September. She must notify HMRC by 30 October and is registered from 1 November, unless HMRC agrees an earlier date.

Example 2

Omar has run a business for several years with taxable turnover of about £60,000 a year. On 10 June he signs a contract and expects to receive £95,000 of taxable income by 9 July. When must he notify HMRC and from when is he registered?

Show the solution
  1. Check the historic test. Annual turnover of about £60,000 is below £90,000, so it is not met at the time.
  2. Check the forward look test. Expected taxable turnover in the 30 days from 10 June to 9 July is £95,000, which exceeds £90,000.
  3. The forward look test is met on 10 June, the day he realises this.
  4. He must notify HMRC by the end of the 30-day period, which is 9 July.
  5. Registration is effective from 10 June, the start of the 30-day period.

Answer: Omar meets the forward look test. He must notify HMRC by 9 July and is registered from 10 June.

Exam tips

  • Highlight the supply types in the scenario. Exempt supplies do not count towards the £90,000.
  • Show a cumulative turnover column. It earns method marks even if you slip on the final date.
  • Write out both dates clearly: the notification deadline and the registration date. Examiners test them separately.
  • Always mention the forward look test in a written answer, even to say it is not met.
  • Know the limit is £90,000 to register and £88,000 to deregister. Both are in the tax tables provided.

Practice questions from The VAT registration requirements

Compulsory VAT Registration Threshold in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Compulsory VAT Registration Threshold: frequently asked questions

What is the VAT registration threshold in TX-UK?

The registration limit is £90,000 of taxable turnover. It is given in the tax tables supplied in the exam, for the Finance Act 2025. Registration is compulsory only when turnover exceeds this figure.

What is the difference between the historic and forward look tests?

The historic test looks back at taxable turnover over the last 12 months at each month-end. The forward look test looks ahead at expected taxable turnover in the next 30 days alone. Meeting either test requires registration.

How long do I have to notify HMRC?

Under the historic test, you must notify within 30 days of the end of the month in which the limit was exceeded. Under the forward look test, you must notify by the end of the 30-day period in which turnover is expected to exceed the limit.

Do zero-rated sales count towards the threshold?

Yes. Zero-rated supplies are taxable supplies, so they count towards taxable turnover. Exempt supplies do not count.