Understanding how to register for VAT becomes important once you reach the £90,000 threshold or decide to register voluntarily. In most cases, you register online through HMRC. From your effective date of registration, you must account for VAT on taxable sales.
Know More About VAT via the Official Government Website and calculate VAT
Step 1: Check What You Need Before Applying
The information required depends on your business type.
Limited Company
You will need:
- Company registration number
- Unique Taxpayer Reference (UTR)
- Business bank account details
- Details of your annual turnover
- An estimate of your taxable turnover for the next 12 months
You may also need information relating to Corporation Tax, Self Assessment, or PAYE.
Sole Trader or Partnership
You will need:
- National Insurance number
- An identity document (such as a passport or driving licence)
- Bank account details
- UTR (if registered for Self Assessment)
- Details of your annual turnover
- An estimate of taxable turnover for the next 12 months
Providing accurate turnover figures is essential, as HMRC uses these to assess your registration status.
Step 2: Register Online
The standard method for how to register for VAT is through HMRC’s online VAT registration service.
You must:
- Sign in using your Government Gateway account
- Create sign-in details if you do not already have them
- Complete the online VAT registration form
Do not need to complete the application in one session. You can save it and return later.
When You Must Register by Post
Online registration is not available in certain situations. You must apply by post using form VAT1 if:
- You are applying for a registration exception
- You are joining the Agricultural Flat Rate Scheme
- You are registering as the representative member of a VAT group
- You are registering separate divisions of a corporate body
- You are a local authority, parish, or district council
- You are an insolvency practitioner registering a business
After You Register
Once approved, HMRC will send you:
- A 9-digit VAT registration number
- Confirmation of your effective date of registration
- Details of your first VAT return deadline
- Instructions for accessing VAT online services
HMRC will also enrol your business in Making Tax Digital for VAT unless you qualify for exemption.
Accounting for VAT While Waiting for Your VAT Number
You must not issue a VAT invoice until you receive your VAT registration number. However, if your effective date has already started, you must still account for VAT on taxable sales from that date.
Example
On 1 May, you agree to a £100,000 contract. You know this will push your turnover above the VAT threshold, so you register.
Your effective date of registration is 1 May. VAT at 20% applies from that date.
To cover the VAT you will owe to HMRC, you increase the contract amount:
Original value: £100,000
VAT at 20%: £20,000
Total amount charged: £120,000
Once you receive your VAT registration number, you issue a proper VAT invoice showing:
- Net amount: £100,000
- VAT: £20,000
- Total: £120,000
Your customer does not pay extra. If they are VAT registered, they can reclaim the £20,000 on their VAT return.