What is the VAT Threshold for 2015/16, 2016/17 and 2017/18?

The UK VAT threshold for registration for the 2015/16 tax year is £82,000, for 2016/17 is £83,000 and for 2017/18 is £85,000 (from 1 April 2017).

These have increased from £81,000 which was the VAT threshold for 2014/15.

VAT Threshold 15-16

In simple terms what you need to do to see if you need to register for VAT is:

Firstly work out what your VAT taxable turnover is, this will enable you to see if you have tripped the VAT threshold.

This is the value of all the things that you sell that are not exempt from VAT.

You must become VAT registered with HMRC if your VAT taxable turnover goes over the current registration VAT threshold in a rolling 12-month period (£85,000 for 17/18, £83,000 for 16/17).

The 17/18 tax year refers to the period 1 April 2017 to 31 March 2018 and 16/17 refers to 1 April 2016 to 31 March 2017.

Remember it is a rolling 12 month period you are looking at so you need to assess it each month for the previous 12 months. This is a good example of why it’s important to use an accounting / book-keeping system to keep on top of your income and expenses – we recommend using a system such as FreeAgent or Xero.

So what do you do if you have gone over the VAT registration threshold?

Let’s say your rolling 12 month VAT taxable turnover goes over the £82,000 on 15 July 2015. You would need to register for VAT with effect 1 September 2015.

You can register online with HMRC or speak with your accountant so they can deal with it on your behalf. HMRC will send you your VAT certificate with your VAT registration number.

It is really important to keep on top of your registration threshold position because if you end up registering late for VAT you will potentially be charged penalties for late registration.

Have you also considered the VAT Flat Rate Scheme? You might be able to make more profit than on the standard scheme – you can read our article about how Flat Rate VAT works.