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What is the VAT threshold?

At what point does your small business have to start paying VAT? Should you voluntarily pay VAT? And what are legitimate ways to stay under the VAT threshold?

The VAT threshold is the volume of annual turnover at which businesses are required to register for value-added tax (VAT). The current UK VAT registration threshold stands at £85,000. The Government has said that this threshold, in place since 2017, will remain unchanged until 31 March 2024. VAT thresholds for previous years are as follows:

  • 2014–2015 – £81,000

  • 2015–2016 – £82,000

  • 2016–2018 – £83,000

  • 2019-2024 – £85,000

Once your business’s turnover reaches the VAT threshold, you have 30 days to register for VAT with HMRC. When this process is complete, your business has a extra responsibilities including:

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