Almost everyone who gets this wrong gets it wrong the same way: they check their turnover against the tax year. HMRC does not. The test is any rolling 12 months — count back twelve months from today, and from tomorrow, and from every day after that. A business six months into its accounting year can be half its annual budget and already past the line, because the twelve months being tested reach back into the year before.
The second thing that follows from “rolling” is stranger, and it is the reason this page draws a line rather than printing a number. The window moves forward one month at a time, so each month a month leaves it. Your rolling total can fall in a month you were paid well, if the month dropping out was better still. It can also rise in a month you barely worked. Neither is intuitive, and neither shows up in a spreadsheet that only ever adds.
The backward look
Register if your taxable turnover for the last 12 months goes over £90,000 (about $119,000). You have 30 days from the end of the month in which you crossed — so crossing on 15 July gives you until 30 August, not 14 August. Your registration takes effect on the first day of the second month after you crossed: 1 September, in that example.
The forward look, which no calculator can do for you
There is a second test, and it can catch a business on its first day of trading. If you realise that your taxable turnover in the next 30 days alone will go over £90,000 (about $119,000), you must register by the end of that 30-day period, and your effective date is the day you realised — not the day the money arrives. One large contract triggers it with no trading history whatsoever. Nothing on this page can predict that, which is why it says so rather than implying the backward look is the whole rule.
Taxable turnover is not profit, and not just the VAT-able part
It is the total value of everything you sell that is not exempt. Costs do not come off it. Zero-rated sales count in full, which is the trap for anyone selling children's clothes, books or most food — they are taxable at 0%, not exempt, so a business can sail past £90,000 (about $119,000) having never charged VAT on anything. What genuinely does not count is exempt supplies and anything outside the scope of VAT.
The expensive part of registering late
Your effective date is set by when you crossed, not by when you noticed. Every sale from that date onwards owed VAT, whether or not your invoices showed any. If you register three months late, you owe HMRC a fifth of three months of sales out of money customers have already paid you — and asking them for it afterwards rarely goes well. This is the reason to watch the rolling figure rather than check it once a year.
Going over once
A single unusual month does not have to mean registration. You can apply for an exception, showing HMRC that the next 12 months will come in under the £88,000 (about $116,000) deregistration threshold. It is their decision, and the time to ask is before the registration deadline rather than after it.