Is the VAT threshold based on profit?

No. It uses taxable turnover. The backward rolling-12-month test and the forward next-30-days-alone test have different effective dates.

When does registration take effect after crossing the backward threshold?

The first day of the second month after crossing, with registration within 30 days of the end of the crossing month. The forward test has a different rule.

Does all trade work carry 20% VAT?

No. Check the VAT treatment of the actual supply, including reduced- and zero-rated cases, rather than assuming the trade name decides it.

VAT Registration for Trades: Tests, Dates and Quotes

Two tests, two effective dates

For a UK-established business, mandatory VAT registration can follow either taxable turnover above £90,000 in the last 12 months or an expectation of more than £90,000 in the next 30 days alone. These are not profit tests or simply your tax-year accounts.

Test	When to register	Effective registration date
Backward: last 12 months exceed threshold	Within 30 days of the end of the month you crossed it	First day of the second month after crossing
Forward: next 30 days alone expected to exceed threshold	By the end of that 30-day period	Date you realised the expectation

HMRC has separate rules for non-established taxable persons, exceptions and exemptions. Use the appropriate guidance if that is your situation.

Sources: HMRC: VAT registration tests and dates, HMRC: the 30-day forward test

Fictional dated cases

Fictional examples. A plumber checks turnover at the end of September 2026 and finds the previous 12 months first exceeded the threshold during September. The backward test means registering by 30 October; the effective date is 1 November 2026, not 1 October.

A builder realises on 2 October 2026 that taxable supplies in the next 30 days alone will exceed the threshold. The forward test has an effective date of 2 October, with registration required by the end of that 30-day period. Do not apply the backward-test delay to this case.

Sources: HMRC: VAT registration tests and dates, HMRC: the 30-day forward test

Copy the turnover and quote worksheet

Check	Your record
Business establishment and relevant test	___
Month-end rolling taxable turnover	Period: ___; total: ___
Next-30-days-alone expectation	Known supplies: ___; date realised: ___
Registration deadline and effective date	___
Quotes awaiting acceptance or work due after that date	References to review: ___
Price/terms communicated to each customer	Version: ___; acknowledgement: ___

Taxable turnover includes standard-, reduced- and zero-rated supplies, not only standard-rated work. Check the treatment of each supply. A domestic customer’s price presentation and an existing contract need attention before adding tax to an old quote.

Sources: HMRC: VAT registration tests and dates, HMRC: VAT rates

Voluntary registration and accounting choices

You can register voluntarily below the threshold. Compare your customer mix, VAT on purchases, administration and applicable schemes with your accountant. A VAT-registered customer is not a guarantee that every purchase is recoverable.

Use HMRC’s Flat Rate Scheme guidance if considering that scheme. VAT reporting and MTD Income Tax are different obligations. MTD VAT uses compatible software, subject to applicable exemptions.

Sources: HMRC: VAT registration tests and dates, HMRC: MTD for VAT

Keep the agreed quote with the tax decision

Record scope, price, VAT treatment and any agreed change in the job quote template. Tradehand quotes from your own rates with trader approval; you supply the correct tax position. A quote tool does not register the business or decide the tax treatment.

Follow the first-job pack to keep the accepted scope and later handover on the same record.