How to Apply for a VAT Number in the UK: Complete Guide for Businesses
For businesses operating in the UK, registering for Value Added Tax (VAT) is a crucial step once your turnover reaches certain thresholds, or if you choose to register voluntarily. Obtaining a VAT number is more than a legal formality — it allows your business to charge VAT on goods and services, reclaim VAT on business purchases, and operate in full compliance with UK tax law.
Whether you are a new business owner, a growing small enterprise, or a seasoned entrepreneur, understanding the VAT registration process will make your journey smoother, reduce the risk of errors, and ensure that you can focus on running your business confidently. This guide walks you through every step of applying for a VAT number in the UK, with clear explanations and practical advice.
What Is a VAT Number & Why It Matters
A VAT number is a unique identifier assigned by HM Revenue & Customs (HMRC) to businesses registered for VAT. It serves as your official proof that your business is recognised for VAT purposes and allows you to operate legally within the UK tax system.
Once you have a VAT number, you can charge VAT on your taxable sales, reclaim VAT on eligible business purchases, and demonstrate to clients and suppliers that your business is compliant with tax regulations. For many businesses, having a VAT number also signals credibility, particularly if you deal with other VAT-registered companies or larger organisations that expect suppliers to be VAT registered.
In the UK, businesses must register for VAT if their taxable turnover exceeds £90,000 in a rolling 12-month period (2025). However, many businesses choose to register voluntarily even if their turnover is below the threshold. Voluntary registration can be especially advantageous for those who regularly incur VAT on business expenses or want to project a professional image in the marketplace.
Who Should Apply for a VAT Number
Not every business needs a VAT number immediately, but knowing whether you fall into the required or voluntary registration category is essential. You should apply for a VAT number if any of the following applies:
- Your taxable turnover has exceeded, or is expected to exceed, £90,000 in the next 30 days
- You wish to register voluntarily to reclaim VAT on purchases or to increase credibility with clients
- Your business is involved in distance selling, such as exporting goods to the EU, where VAT rules apply
Even if you are unsure about your projected turnover, it’s better to consider registration early rather than risk fines and penalties for late registration.
Preparing for VAT Registration
Before beginning your application, preparation is key. Having the correct information ready not only makes the process faster but also reduces the chance of errors that could delay approval.
You will need:
- Your business structure details — whether you operate as a sole trader, partnership, or limited company
- Your Unique Taxpayer Reference (UTR) if you already have one. This links your VAT registration to your existing HMRC records
- National Insurance number or company registration number, depending on your business structure
- Estimates of your turnover for the next 12 months
- Business bank account details
- A Government Gateway account, which is required to apply online
In addition, it’s a good idea to have a clear understanding of your business activities and what goods or services you provide. This helps HMRC classify your VAT responsibilities correctly and can prevent delays caused by clarification requests.
Step-by-Step: How to Apply for Your VAT Number
There are two primary routes for VAT registration: online and postal.
- Online via HMRC Portal
The fastest and most convenient method is to apply online through your Government Gateway account. You will need to complete the VAT registration form with accurate business details, projected turnover, and your preferred VAT accounting scheme. Once submitted, HMRC typically processes online applications within 14 to 30 days. Occasionally, they may request additional documentation to verify your identity or confirm your business activities, which can extend the timeline slightly.
- Postal Application Using Form VAT1
This older method is less common and generally slower but may be required in specific situations, such as for certain agricultural schemes or group registrations. After completing the form, you mail it to HMRC, who will process it over a longer period compared to the online method.
Sterling & Wells can assist with both routes but prioritises online registration to ensure speed, accuracy, and compliance, reducing the risk of mistakes that could delay your VAT number issuance.
Choosing the Right VAT Accounting Scheme
When applying for VAT, you will also select an accounting scheme. This decision affects how and when you report VAT to HMRC, as well as your cash flow. The main options include:
- Standard VAT Accounting: The most common method. VAT returns are submitted quarterly based on invoices issued during the period.
- Flat Rate Scheme: Simplifies VAT reporting by charging a fixed percentage of your turnover, which is useful for small businesses looking to reduce administrative effort.
- Annual Accounting Scheme: Allows businesses to make advance payments and file a single VAT return annually, providing cash flow flexibility.
- Cash Accounting Scheme: VAT is paid based on cash received and paid, and is available for businesses with turnover under £1.35 million.
Choosing the correct scheme can make a real difference to your business operations.
After You Receive Your VAT Number
Once HMRC approves your registration and issues your VAT number:
- Include it on all invoices, receipts and official documents.
- Legally charge VAT on all taxable goods and services in line with your selected scheme.
- Keep detailed records of VAT charged and reclaimed, ensuring smooth and accurate filing.
- Submit VAT returns on time using HMRC’s online portal to avoid penalties.
Common Questions and Considerations
Many businesses have questions when registering for VAT. Some of the most common include:
- Is voluntary registration beneficial? Yes — it allows you to reclaim VAT on purchases, but it also adds administrative requirements and costs.
- What happens if I register late? Late registration can result in penalties and interest on VAT owed, making early action critical.
- Do I need to change my accounting system? You may need to ensure your accounting system can track VAT accurately, particularly if filing online.
Why Sterling & Wells Is the Right Partner for VAT Registration
Navigating VAT registration can be daunting, especially for first-time business owners. Sterling & Wells provides personalised guidance to simplify the process, including:
- Assessing your eligibility for VAT registration.
- Completing and submitting applications accurately online.
- Recommending the most suitable VAT accounting scheme.
- Ongoing support for VAT record-keeping and filing.
With expert advice and hands-on assistance, you can complete your VAT registration confidently, avoiding delays, errors, and unnecessary stress.
Conclusion
Applying for a VAT number in the UK is a vital step for any business reaching or approaching the registration threshold. By understanding the eligibility criteria, preparing the necessary information, selecting the right accounting scheme, and submitting your application carefully, you can secure your VAT number efficiently and start operating within the UK tax system legally.
Sterling & Wells offers comprehensive support throughout the registration process and beyond, providing expert guidance to make VAT compliance simple and stress-free. If you’re ready to take this next step or want personalised advice for your business, contact Sterling & Wells today — your VAT registration and ongoing compliance are in safe hands.
Sterling & Wells
We are Sterling & Wells — a UK-based team of accountants and tax advisors helping individuals and businesses stay fully HMRC compliant. From VAT and bookkeeping to self-assessments and tax planning, we’ve got your finances covered.