At the end of every month, add up the value of your taxable supplies for the 12 months just ended. If the total is over £90,000, you must tell HMRC within 30 days of the end of that month, and you will be registered from the first day of the second month after you went over.

What exactly is the rolling 12 month test?

The rolling test is the backward look in the VAT Act 1994, Schedule 1, paragraph 1(1)(a). A UK established person who makes taxable supplies and is not registered becomes liable to be registered at the end of any month if the value of their taxable supplies in the year then ending has exceeded the registration threshold. For 2026 to 2027 that threshold is £90,000, the same figure that has applied since 1 April 2024.

The test is rolling because the 12 month window moves forward one month at a time. It is not tied to your accounting year, the tax year or the calendar year. A business with a quiet January and a busy August can be under the threshold on every set of annual accounts and still cross it on a rolling basis part way through a year. HMRC’s own manual at VATREG18100 describes this as determining liability by reference to the value of supplies in the preceding 12 months.

This page focuses on running the monthly check. For an overview of the threshold itself, see the VAT registration threshold.

How do I run the check each month?

On the last day of each month, take the value of taxable supplies for that month and the 11 months before it, and compare the total with £90,000. A simple routine works for most small businesses:

  1. Keep a monthly total of taxable sales, excluding exempt and out of scope income.
  2. At each month end, add the latest month and drop the month that has fallen out of the window.
  3. If the new total is more than £90,000, you have crossed the threshold at the end of that month.
  4. Diary the 30 day notification deadline and the effective date straight away.

A business that has traded for less than a year uses whatever period it has. Notice 700/1 paragraph 3.3 says you are liable if, at the end of any month, the value of your taxable supplies in the previous 12 months or less is over the threshold. The threshold must be exceeded, so a rolling total of exactly £90,000 does not create a liability.

The month a sale belongs to is decided by its time of supply, not by when you happen to raise an invoice (VATREG18250 and VATREG26200). Before registration an invoice cannot create a tax point, so the basic rules apply: the date goods are removed or made available, the date a service is performed, or an earlier payment. Our page on VAT time of supply explains those rules.

Which sales count towards the total?

Taxable turnover is the value of everything you supply that is not exempt or outside the scope of VAT, measured excluding VAT (VATREG02300). GOV.UK lists what it includes:

  • standard rated, reduced rated and zero rated goods and services
  • goods hired or loaned to customers
  • business goods used for personal reasons
  • goods bartered, part exchanged or given as gifts
  • services received from overseas businesses that you have to reverse charge
  • supplies under the domestic reverse charge
  • building work over £100,000 that the business did for itself

Some items are left out. Sales of capital assets such as equipment, vehicles or premises are disregarded under paragraph 1(7) of Schedule 1, except that a sale of an interest in property that is taxable other than at the zero rate (for example, commercial property you have opted to tax) must be included under paragraph 1(8). Exempt supplies are excluded, and supplies whose place of supply is outside the UK are disregarded (VATREG02550).

When must I tell HMRC and when does registration start?

Schedule 1, paragraph 5 sets two dates. You must notify HMRC within 30 days of the end of the month in which the threshold was exceeded. HMRC will then register you from the end of the month following that month, or from an earlier date agreed with you. GOV.UK puts this as an effective date of registration on the first day of the second month after you go over.

Threshold first exceeded Liable at Notify by Effective date
22 April 30 April 30 May 1 June
31 August 31 August 30 September 1 October

The first row is HMRC’s example at VATREG18300 and the second is from Notice 700/1 paragraph 4.4. In the gap between becoming liable and the effective date you are not yet a taxable person, but from the effective date you must account for VAT on your taxable supplies whether or not your VAT number has arrived. Notice 700/1 paragraph 5.1 says you can raise prices to include VAT but must not show VAT separately on invoices until you have the number, and should then send VAT invoices to VAT registered customers within 30 days of receiving it.

Worked example: a seasonal business crossing part way through the year

Illustration only. A garden design sole trader has accounts to 31 March. Annual turnover in the year to 31 March 2026 was £84,000, all standard rated, so the owner assumed there was no issue.

Month end Rolling 12 month total Position
31 March 2026 £84,000 Below threshold
30 April 2026 £86,500 Below threshold
31 May 2026 £89,200 Below threshold
30 June 2026 £92,100 Threshold exceeded

The business became liable at the end of June 2026. It had to notify HMRC by 30 July 2026 and its effective date of registration is 1 August 2026. Looking only at the March year end accounts, the owner would not have noticed until the following spring, by which time many months of sales would have been made without VAT being charged.

What if I was registered before, or run more than one business?

If you were previously registered and deregistered, paragraph 1(4) of Schedule 1 normally lets you ignore turnover from the period of previous registration when you run the rolling test. HMRC explains at VATREG18150 that a person registered for less than a year must still include turnover from before that registration if it falls within the last 12 months, and that HMRC will not allow the disregard where information was withheld or HMRC was misled when the registration was cancelled.

VAT registration belongs to the person, not the business name. A sole trader with two trades adds the turnover of both, which is covered in one VAT registration for sole traders. Splitting a business between connected people to keep each part under the threshold can be challenged under paragraphs 1A and 2 of Schedule 1, which deal with artificial separation of business activities; see VAT disaggregation.

Can the forward look test apply at the same time?

Yes. The rolling test looks back; the 30 day test in paragraph 1(1)(b) looks ahead at the next 30 days alone. If both are triggered at the same time, paragraph 8 of Schedule 1 says HMRC registers you under the forward look date rather than the backward look date, which is earlier. HMRC is also clear that a business expecting to cross the 12 month total only because of next month’s sales is caught by the rolling test at the end of that month, not by the forward look (VATREG18200). See the 30 day forward look test.

What are the common mistakes?

  • Checking once a year. The test runs at the end of every month, so annual accounts are too late to spot it.
  • Counting only standard rated sales. Zero rated and reduced rated sales count towards taxable turnover.
  • Using invoice dates loosely. The time of supply decides the month, so work completed in one month but invoiced later still belongs to the earlier month.
  • Including one off asset sales. Selling the old van or equipment is normally left out under paragraph 1(7).
  • Assuming a spike will go away. If the threshold was crossed only because of an unusual month, you still have to act. You may be able to apply for exception from registration, but that needs HMRC’s agreement.

Missing the 30 day deadline does not change your effective date. HMRC registers you from the date you should have been registered and can charge a failure to notify penalty; see what happens if you register for VAT late.

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Sources

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.