In the UK, the VAT threshold is currently set at £85,000 (for the 22-23 tax year). This means that if your taxable turnover in a rolling 12-month period exceeds £85,000, VAT registration is compulsory. (Please note that it is not £85,000 in a financial or a tax year, so if you are approaching the threshold, you will need to monitor this every month).

Your taxable turnover is made up of sales of products or services to customers in the UK or the EU. Sales outside of the UK or the EU do not count towards to your taxable turnover BUT you must ensure you keep detailed records of those Rest of World sales to prove they do not count towards your turnover. We would recommend keeping these sales separate to your UK and EU sales so that they can be monitored carefully.

In addition, if you sell digital products (eg downloadable documents, pre-recorded training courses etc), there is a different threshold of £8,818. This is covered in another FAQ post.