Do I need to register for VAT as a sole trader?

Only if your taxable turnover goes over £90,000 in any rolling 12 months, or you expect it to in the next 30 days alone. That was the threshold in October 2026. Below it, registering is your choice.

Being a sole trader makes no difference to the test. It is the same for every business, and it is about sales, not profit. For most trades that means the total of your invoices, labour and materials together, before any costs or CIS deductions.

The VAT figures that matter to trades

Under the Flat Rate Scheme you get 1 percentage point off your rate in your first year of VAT registration.

How the 12-month test works

A worked example. A joiner invoices £7,000 every month, which is £84,000 over 12 months. Then a big job brings in £14,000 in one month. The rolling total becomes £84,000, less the £7,000 month that dropped off, plus £14,000: £91,000. That is over £90,000, so the joiner must register.

GOV.UK sets the deadline. You must register within 30 days of the end of the month you went over. Your registration then takes effect from the first day of the second month. In GOV.UK's own example, turnover first goes over the threshold on 15 July, so you must register by 30 August and VAT applies from 1 September.

There is a separate forward-looking test. If you realise a single contract will take you over £90,000 in the next 30 days, you must register within those 30 days, and VAT applies from the date you realised. GOV.UK's example is a £100,000 contract arranged on 1 May: register by 30 May, with VAT from 1 May.

The reverse charge for building work

Once you are VAT-registered, the VAT domestic reverse charge applies to most building and construction services supplied between VAT-registered businesses and reported under CIS. In practice, if you are a subcontractor working for a VAT-registered contractor, you do not add VAT to your bill. The contractor accounts for it instead.

HMRC's technical guide points out that your customers will not be paying you VAT, so you should plan for the effect on your cash flow. The reverse charge does not apply to private householders. Nor does it apply where a business customer tells you in writing that it is an end user.

What this means for you

Check your rolling total at the end of every month, not once a year. A run of big jobs can take you over the threshold quickly, and registering late means paying VAT on sales you never charged it on, perhaps with a penalty as well.

Think about whether your customers are householders or VAT-registered contractors. Adding VAT to a householder's bill can make you dearer than a rival who is not registered. For work under the reverse charge, your price to the contractor does not change.

Steps to check and register

1. At the end of each month, add up your sales for the last 12 months.
2. Before taking on a large job, check whether that contract alone will take you over £90,000 in the next 30 days.
3. If you go over, register online within 30 days of the end of that month.
4. From your registration date, charge VAT to householders and apply the reverse charge where it applies.
5. Keep digital records and file VAT returns with software that works with Making Tax Digital for VAT. That has applied to all VAT-registered businesses since 1 April 2022.
6. Check whether the Flat Rate Scheme would suit you, and whether the 16.5% limited cost rate would apply.

VAT is separate from Making Tax Digital for Income Tax (MTD), which starts on 6 April 2027 if your qualifying income was over £30,000 on your 2025-26 tax return. Use the free MTD check for that, and the trades section for more guides for the building trades.