When do you have to register for VAT? The £90,000 threshold for tradesmen

You must register for VAT once your taxable turnover passes £90,000 in any rolling 12-month period — or as soon as you expect to cross it within the next 30 days. The deadline is tight: register within 30 days of going over, and HMRC backdates your liability if you are late. That backdated VAT comes out of your pocket if you never charged it.

What changes when you register

You add 20% VAT to most work, show your VAT number and the VAT split on every invoice, file VAT returns under Making Tax Digital, and you can reclaim the VAT on your purchases. Watch the rate per job — some construction is reduced-rated at 5%, and a genuine new build can be zero-rated.

The rolling 12 months catches people out

It is not your tax year — it is any 12 months. A good run of work can tip you over in the middle of the year without you noticing. Track your trailing turnover month by month so registration is a decision you make on time, not a backdated bill that lands later.

Should you register voluntarily?

Below £90,000 you can register voluntarily. It is worth it when your customers are VAT-registered businesses — they reclaim the VAT, so your price does not really rise for them, and you get to reclaim VAT on your own materials. It is usually not worth it when your customers are private homeowners, because your prices effectively jump 20% overnight.

The threshold is a rolling 12 months, not your tax year — watch your trailing turnover so VAT registration is a decision, not a backdated bill.

And the reverse charge

Once you are registered, business-to-business construction may fall under the domestic reverse charge — you do not collect the VAT, the contractor accounts for it. That is separate from registration and trips people up on its own; see the CIS domestic reverse charge guide.

How to keep it clean

MarginTap puts your VAT number and the right VAT treatment on every invoice — standard, reduced or reverse charge — so the moment you register, a compliant invoice is the default. Quote on site, convert the accepted quote to an invoice, and send it before you leave.

[ See how MarginTap handles VAT → ]

None of this replaces advice from your accountant or HMRC — thresholds and rules change, and your situation may have a wrinkle this guide does not cover. Next, see how to quote a job without underpricing yourself.