Publication date: 06.02.2026
My name is Irina Sidorova and I am a lawyer based in London. I have over 18 years of experience in law and prior to moving to the UK I specialized in litigation, corporate support, contract analysis and drafting, and commercial legal support. My expertise includes a detailed analysis of legislative changes and their effective application to protect clients' interests. Thanks to my strategic approach, knowledge of the law and practical experience, I help to avoid legal risks and achieve stability in legal matters.
The process of VAT registration in the United Kingdom has its own specifics depending on the type of activity, annual turnover, and the status of the entrepreneur. Businesses and self-employed individuals are not always required to register for value added tax if their annual turnover does not exceed the threshold set by HMRC. However, in cases where annual turnover exceeds the limit, or where the activity involves international supplies of goods and services, VAT registration becomes mandatory. Voluntary VAT registration is also possible if a business plans to work with clients as a VAT payer or reclaim input value added tax.
Question
How does VAT registration work in the UK?
Answer
If an entrepreneur or company is subject to VAT registration, HMRC reviews the nature of the business activity, annual turnover, types of supplies, and tax accounting history. The process includes:
- Submitting an online application for VAT registration through the HMRC system;
- Choosing the appropriate VAT scheme (Standard Rate, Flat Rate Scheme, etc.);
- Verifying business details, directors, or the owner;
- Receiving a VAT number and the effective date of VAT registration;
- Setting up tax accounting systems and preparing for VAT return submissions.
- For small businesses with low annual turnover, it may be possible to delay VAT registration or opt for voluntary registration, taking financial considerations into account.
Important documents to have on hand
- For effective VAT registration and ongoing tax accounting, it is recommended to prepare:
- Company registration details or proof of self-employed status;
- Documents confirming the business address in the UK;
- Bank details for interaction with HMRC;
- Contracts with clients and suppliers;
- Financial statements or annual turnover forecasts.
- Accurate documentation and transparent tax accounting help avoid delays in VAT registration and reduce the risk of audits by HMRC.
Question
What should be done in case of errors or problems with VAT?
Answer
If an entrepreneur identifies errors in VAT return submissions or is unsure about the correctness of value added tax calculations, it is necessary to:
- Contact a tax advisor or HMRC;
- Submit amended VAT return forms within the prescribed deadlines;
- Check the correct application of VAT rates to goods and services;
- Keep internal records of all transactions and correspondence with HMRC;
- If necessary, appeal HMRC decisions through established procedures.
- Timely action reduces the risk of fines, penalties, and suspension of the VAT payer account.
Important to know
VAT registration is critically important for businesses in the UK, especially for companies with active sales, international operations, or contracts with large clients. Incorrect application of value added tax, late submission of VAT return, or failure to register when the threshold is exceeded can result in significant fines and tax assessments. Regular monitoring of records and updating tax accounting helps maintain financial stability and the business’s reputation.
VAT registration establishes tax discipline, increases trust among counterparties, and opens up opportunities for business growth in the UK. Consulting a tax specialist helps choose the right VAT scheme, prepare documents, avoid reporting errors, and minimise tax risks, including proper handling of VAT number, VAT return, and ongoing tax accounting with HMRC.
