The earnings threshold above which businesses must register for and start charging VAT has been increased.  

Effective from 1 April 2024, the taxable turnover above which a business is required to register and account for VAT will be increased from £85,000 to £90,000. This is the first change to the VAT registration threshold since April 2017.

If your business is VAT registered, you can choose to deregister if you expect taxable sales to be less than £83,000 in the next 12 months. This deregistration threshold will also increase to £88,000 on 1 April 2024.

Traders with taxable turnover below the VAT registration threshold can opt to register for VAT voluntarily. This allows them to reclaim input VAT paid on their costs.                                                

For businesses trading below the limits, the decision to register voluntarily, or deregister, will largely depend on whether the level of reclaimable input tax will exceed the cost and time of administering VAT. This includes compliance with Making Tax Digital for VAT. We can help you decide.