What is the threshold for mandatory VAT registration in the UK?

The threshold for mandatory VAT registration in the UK is £85,000 in taxable turnover. This means that businesses whose taxable turnover exceeds this amount within a 12-month period are required to register for VAT with HM Revenue and Customs (HMRC). The concept of taxable turnover includes all sales that are subject to VAT, whether at the standard rate, reduced rate, or zero rate, but excludes exempt sales and certain other specific items.

It’s important for businesses to monitor their taxable turnover closely because failing to register when required can lead to penalties and the requirement to account for VAT from the date of exceeding the threshold, regardless of the business’s actual awareness of the requirement. Thus, understanding this threshold is crucial for compliance and financial management within a business setting.