Registered VAT businesses
Approximately 2.5 million UK businesses are VAT-registered per the most recent HMRC published data. This includes voluntary registrations (below the £90k threshold) as well as compulsory.
VAT receipts
VAT is one of the UK's three largest tax revenue sources. HMRC's published VAT receipts run to approximately £160-170 billion per year in the most recent published years — around 15-16% of total UK tax receipts.
Registration threshold history
The UK VAT registration threshold has increased broadly in line with inflation over the last decade:
- April 2017: £85,000
- April 2018: £85,000 (frozen)
- ...held at £85,000 through to March 2024...
- April 2024: £90,000 (current)
Making Tax Digital adoption
Since April 2022, MTD for VAT has been mandatory for all VAT-registered businesses regardless of turnover. HMRC's compliance data suggests near-universal adoption of MTD-compatible software among VAT-registered freelancers.
Sources
£90,000 taxable turnover over any rolling 12-month period, effective April 2024.
Historically every few years, usually in line with inflation. The 2024 increase to £90,000 followed 7 years at £85,000.
Yes — several hundred thousand UK businesses register voluntarily below the threshold, usually because their clients are VAT-registered and can reclaim the VAT.