UK raises the VAT registration threshold to £90,000 and deregistration to £88,000

What changed in detail

The Value Added Tax (Increase of Registration Limits) Order 2024 (SI 2024/307) was made on 5 March 2024 and came into force on 1 April 2024. Article 2 amends the Value Added Tax Act 1994:

• Schedule 1, paragraph 1(1) and (2): the registration threshold rises from £85,000 to £90,000. This covers both the backward-looking test (taxable supplies in the past 12 months) and the test on taking over a business as a going concern.
• Schedule 1, paragraphs 1(3) and 4: the deregistration threshold rises from £83,000 to £88,000.
• Schedule 9ZA, paragraphs 38 and 39: the Northern Ireland threshold for acquisitions of goods from EU member states rises from £85,000 to £90,000.

The registration threshold had been £85,000 since 1 April 2017. The forward-looking 30-day test, which applies when turnover in the next 30 days alone is expected to exceed the threshold, uses the same figure.

What it means

This change is still in force. legislation.gov.uk shows £90,000 in Schedule 1, paragraph 1, of the Value Added Tax Act 1994, and lists no outstanding effects on that paragraph. No later order has changed either the registration or the deregistration figure.

The rise ended a seven-year freeze. A business with turnover between £85,000 and £90,000 that had registered only because of the old limit could apply to deregister once its expected turnover fell below £88,000. Registration is still compulsory for anyone whose rolling 12-month taxable turnover goes over £90,000.