Businesses and individuals need to register for VAT if their turnover in the last 12 months exceeded the VAT registration threshold, or if it is expected to do so within the next 30 days.

The VAT registration threshold changes each year, roughly in line with inflation. It is currently (as of 1 May 2009) set at  £68,000.

If your annual turnover exceeds the threshold, you may wish to read our article on how to register for VAT.

You also have to register for VAT if:

• You have taken over a company and your combined turnovers for the previous 12 months exceeds the VAT registration threshold. If you expect the turnover to fall below the threshold in the coming 12 months, you can apply for an exemption from HMRC.
• You received goods from other EU countries during the current calendar year (from 1st January) with a combined value that exceeds the VAT registration threshold, or if you expect to do so within the next 30 days.

VAT deregistration

Once registered, you can only apply for deregistration if your turnover falls below the deregistration threshold. This is currently set at £66,000. If you only temporarily exceeded the registration threshold and can show that you expect your turnover to fall below the deregistration threshold soon (take a deep breath), you can apply to HMRC for an exemption.

Voluntary VAT registration

Even if your turnover does not exceed the registration threshold, it is still possible to apply for voluntary VAT registration. This might be of financial benefit to you, depending on your circumstances. See our article on voluntary VAT registration for more information.