When must a client register for VAT? The £90,000 test, the 30-day deadline and a worked date for a client who crosses it in October

A client must register for VAT when their total taxable turnover for the last 12 months goes over £90,000, on GOV.UK's pages read on 6 October 2026. The deadline is 30 days from the end of the month in which that happened. The client's registration then takes effect from the first day of the second month after the month they went over.

Two tests, not one

GOV.UK gives two separate triggers:

1. The looking-back test. Taxable turnover for the last 12 months goes over £90,000. This is a rolling total, not the tax year and not the accounting year. It has to be checked every month.
2. The looking-forward test. The client expects taxable turnover to go over £90,000 in the next 30 days alone. GOV.UK says the effective date is then the date they realised, not the date turnover crossed the threshold.

The second test catches a client who lands a large contract. The first catches the client who drifts up unnoticed, which is the more common case in a practice.

One client, worked through

A client has £7,400 of taxable sales in every month from October 2025 to September 2026.

The client is £400 over at the end of October 2026. The dates then run:

• Month they went over: October 2026.
• Register within 30 days of the end of that month: by 30 November 2026.
• Effective date: first day of the second month after October, which is 1 December 2026.

So the client is registered from 1 December even if the application goes in on 30 November. They charge VAT on sales from that day, and the practice has about a month to get them ready with software, invoices and prices.

If nobody notices

GOV.UK says a client who registers late must pay VAT on any sales since the date they should have registered, and might need to pay a penalty. We did not find the penalty rate on the pages read, so we have not quoted one.

The VAT alone is easy to work. If the client sells £9,000 in December 2026 and is registered only in January, the bill for December is:

• £1,800 if the client can add VAT on top of the price (20% of £9,000);
• £1,500 if the £9,000 was a price customers already paid and VAT has to come out of it (£9,000 / 6).

We did not confirm from the pages read which of those applies to a given client, and it depends on what the client agreed with their customers. Either way, it comes out of the client's margin, not the customer's pocket, unless the contract allows otherwise.

Things the monthly check must use

• Taxable turnover only. The test is on taxable turnover, so a check on all income may count sales that do not count.
• A rolling 12 months, recalculated at each month end.
• Voluntary registration is allowed below £90,000, GOV.UK says, so a client under the line may still choose to register.
• Temporary breaches. GOV.UK mentions a registration exception where turnover goes over the threshold only temporarily. We did not read the conditions, so check them before relying on it.

What the practice diarises

1. A month-end turnover total for every client below £90,000, with a flag at, say, £80,000. That figure is our suggestion, not HMRC's.
2. A 30-day look-ahead after any big order or contract.
3. The registration deadline the day a client crosses the line.

This sits well with the other date work in the file. Our which penalty applies guide is where late VAT returns and Self Assessment penalties are separated, and the practice readiness check lists the other client dates a practice should hold. A new client's onboarding checklist is the right place to ask for 12 months of turnover on day one.

Overlyft can set up an AI assistant that reads each client's monthly sales from the practice's bookkeeping software, keeps the rolling 12-month total and emails the partner a list of every client within £10,000 of the VAT threshold. The accountant decides and registers.

This is general information, not professional advice.