When do I need to register for VAT as a freelancer?

You must register for VAT when your taxable turnover over any rolling 12 months goes above £90,000, or when you expect to pass it in the next 30 days alone. Below that, registration is voluntary, and it usually only makes sense if your clients are VAT-registered businesses.

To check your own figures, use our free VAT calculator: it adds or removes VAT and tests your turnover against the threshold.

Two tests

The historic test looks back over the last 12 months, every month, not the tax year. If the total passes £90,000 you must notify HMRC within 30 days of the end of that month.

The forward test asks whether you expect to pass £90,000 in the next 30 days alone, for example because of one large contract. If so, you must register by the end of that 30 days.

What counts

Taxable turnover means sales of standard, reduced and zero-rated goods or services, excluding VAT. Exempt income does not count. Income from all your businesses is added together. You can apply to deregister if you expect your taxable turnover in the next 12 months to be £88,000 or less.

Worked example

Voluntary registration

It lets you reclaim VAT on your own costs, and it can make you look more established. It hurts if you sell to consumers who cannot reclaim VAT. The Flat Rate Scheme can simplify returns, but limited cost traders pay 16.5% of turnover, so model it before you join.

What to do

1. Check your rolling 12-month turnover monthly, not once a year.
2. Diarise the 30-day notification deadline as soon as you get close.
3. Decide on a scheme before you register: standard, flat rate or cash accounting.
4. Once registered, use MTD-compatible software from the first return.

Common mistakes

• Measuring turnover per tax year instead of per rolling 12 months.
• Forgetting a second income stream that also counts.
• Registering late: you owe the VAT from the date you should have registered, even if you did not charge it.

Sources: GOV.UK: VAT registration thresholds