VAT Registration Number: When Do You Need One for Your Business?

Introduction: Why VAT Registration Matters in 2025

VAT may be confusing—but registering at the right time saves fines and fuels growth in the UK’s £2.7T economy (IMF, 2025). A VAT registration number lets you charge and reclaim VAT, boosting credibility for e-commerce and international trade. Whether you’re a UK resident, non-resident, or Etsy/Amazon seller, knowing when VAT is mandatory or optional is key to compliance and success. Explore our tailored packages to find the perfect fit for your business. Let’s dive in!

1. What Is a VAT Registration Number?

A VAT registration number is a unique 9-digit identifier, typically formatted as “GB” followed by 9 digits (e.g., GB123456789) issued by HMRC to businesses charging or reclaiming VAT.

It serves multiple critical functions:

• Tracks VAT Transactions: Ensures accurate reporting of VAT charged on sales and paid on purchases.
• Ensures Compliance: Mandatory for businesses with a taxable turnover above £90,000 or specific non-resident activities.
• Boosts Credibility: Signals professionalism, with 68,000+ e-commerce firms leveraging UK LTDs for trust in platforms like Etsy, Amazon, and Shopify (Statista, 2024).
• Facilitates International Trade: Simplifies cross-border transactions, especially within the EU, supported by 130+ tax treaties to avoid double taxation (GOV.UK, 2025).

In short, it tracks VAT transactions, ensures compliance, and signals trust, a foundation that modern e-commerce businesses cannot afford to ignore. FormationsHunt makes VAT registration simple and seamless, guiding both residents and non-residents through the process with expert support.

2. When to Voluntarily Register for VAT

Voluntary VAT registration can be a strategic advantage, even if your business hasn’t crossed the mandatory £90,000 turnover threshold. Many startups and e-commerce sellers choose to register early because it offers benefits that go beyond compliance:

• Reclaim VAT on expenses: If you’re running an Amazon FBA or Etsy store, you’re likely paying VAT on fulfilment fees, storage costs, stock purchases, or even software subscriptions. Voluntary registration allows you to claim back that input VAT, reducing overall costs.
   
• Boost business credibility: For B2B clients, having a VAT number signals that you’re a professional, established business. Many larger clients prefer dealing with VAT-registered companies.
   
• Smooth global trade: If you’re a non-resident founder selling internationally, voluntary registration simplifies cross-border transactions, especially within the EU. It ensures you can trade seamlessly without unnecessary VAT complications.

This is why Etsy and Amazon sellers, as well as early-stage startups, often opt for voluntary VAT registration. FormationsHunt makes the process simple by handling your VAT application accurately and guiding you through reclaim opportunities, so you can focus on scaling your business while staying compliant.

3. Steps to Get a VAT Registration Number

Getting a VAT registration number is a straightforward process, but it’s easy to trip up if you’re new to the UK system. Here’s how it works step by step:

1. Check Eligibility:

   1. You’re required to register if your turnover exceeds £90,000 in a rolling 12-month period, or if you expect to exceed that threshold within the next 30 days.
   2. Non-resident businesses are often required to register immediately, regardless of turnover, if selling taxable goods/services in the UK.

2. Register Online:

   Forget the hassle of using HMRC’s VAT portal. Normally, you’d need to submit details like your Unique Taxpayer Reference (UTR), estimated turnover, and business information yourself. But with FormationsHunt, you don’t need to worry; we’ll handle the entire VAT registration process online on your behalf, making it quick, accurate, and stress-free.
   1. Fully Online Application – Go to our VAT registration page and click on Buy Now. Then just provide us with your business details like company name, company number, and estimated turnover or details.
   2. Processing Time – Once you submit your VAT registration through our system, we handle the filing directly with HMRC. Typically, it takes 30–45 days to receive your VAT number, though occasional delays may occur due to HMRC workload.
   3. No Delays or Errors – We ensure your application is correct the first time, avoiding HMRC rejections that can slow down the process.
   4. Tracking & Updates – We keep you informed every step of the way until your VAT number is issued.
      
      With us, you don’t need to worry about paperwork or confusing government forms; we make sure your VAT number is secured smoothly and efficiently.

3. Receive Your VAT Number:

   1. VAT numbers are issued in the format 'GB' followed by 9 digits(e.g., GB123456789).
   2. Your VAT certificate will confirm your start date, filing deadlines, and obligations.

Curious to see how VAT applies to your business in real time?
Try the VAT Calculator to estimate your VAT liability instantly. 

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4. When Is VAT Registration Mandatory?

VAT registration becomes compulsory in the following cases (GOV.UK, 2025):

• UK Residents: If your taxable turnover exceeds £90,000 in any 12-month period or is expected to cross the threshold within 30 days.
• Non-Residents: If you are a non-established taxable person (NETP)—a business without a fixed UK base but making taxable supplies in the UK—you must register regardless of turnover.
• EU/International Transactions: Buying over £90,000 of goods from EU VAT-registered suppliers also triggers registration.
  Example: An Etsy seller with £95,000 in UK sales must register within 30 days or face penalties.

5. LLP vs. LTD: VAT Registration Needs

Your business structure affects not just tax treatment but also how VAT registration fits into your strategy:

• Limited Company (LTD):
  • VAT registration becomes mandatory at £90,000 turnover, but many LTDs register early to reclaim VAT on purchases and appear professional to clients.
  • Corporation tax charged at 19% on profits up to £50,000 and 25% for profits over £250,000 (GOV.UK, 2025).
  • This structure is often best for entrepreneurs who want to separate personal liability from the company while benefiting from corporate tax planning.
• Limited Liability Partnership (LLP):
  • The same £90,000 VAT threshold applies, but the tax treatment is very different.
  • LLPs are tax-transparent, meaning profits are taxed on the members rather than at the company level. This is particularly advantageous for non-resident founders, as the UK’s 130+ double-tax treaties help avoid being taxed twice on the same income.
  • LLPs suit businesses with multiple partners, professional services, or joint ventures.

Whichever structure you choose, LTD or LLP, our expert services take care of VAT registration effortlessly. It also provides full compliance support, giving international founders the confidence to trade globally.

6. Exceptions: When You Don’t Need a VAT Number

Not every UK business needs a VAT number, but knowing the exceptions avoids unnecessary paperwork:

• VAT-exempt supplies: If your business deals exclusively in exempt goods or services, such as insurance, healthcare, or certain types of education, these are considered ‘out of scope’ for VAT, you don’t need to register.
• Below threshold, no EU purchases: If your annual taxable turnover is under £90,000 and you don’t buy goods from the EU, you’re not required to register.
• Special case for non-residents: However, if you’re a non-resident selling to UK customers, you may still need to register even if your turnover is below the threshold. This catches many foreign founders off guard.

To avoid mistakes, FormationsHunt offers a free VAT consultation.

7. VAT Schemes: Choosing the Right One

Once you're registered, you don’t have to stick to the standard VAT system, HMRC offers simplified schemes designed to reduce admin and improve cash flow. Picking the right one can save you both time and money:

• Flat Rate Scheme:

  • For businesses with turnover under £150,000 (excluding VAT).
  • Rather than calculating input and output VAT on each transaction, you pay a fixed percentage of your turnover to HMRC.
  • Advantage: Less paperwork, predictable payments.
  • Example: An Amazon seller with £80,000 turnover pays VAT at a flat 7.5% instead of tracking hundreds of micro-expenses.

• Cash Accounting Scheme:

  • You pay VAT only when your customers pay you, and you can reclaim VAT only when you’ve paid your suppliers.
  • Ideal for businesses with long customer payment cycles or frequent late payers.
  • Example: A B2B consultancy invoicing clients on 60-day terms won’t need to pay VAT to HMRC until they actually receive payment.

• Annual Accounting Scheme:

  • Submit a single VAT return annually and spread your VAT payments throughout the year in installments.
  • Helps with cash flow management and reduces quarterly admin.
  • Example: A non-resident LTD selling seasonal products avoids quarterly paperwork by filing once annually.

• Retail Scheme:

  • Designed for retailers who sell many items at different VAT rates like, Supermarkets / Grocery Shops, Clothing Stores, Electronics / Department Stores, Convenience Shops / Newsagents, etc.
  • Instead of calculating VAT on each sale, you apply a standard method approved by HMRC (e.g., apportionment, direct calculation, or point-of-sale).
  • Advantage: Saves huge admin time for shops and e-commerce sellers dealing with hundreds or thousands of small transactions.
  • Example: A corner shop selling newspapers (zero-rated), soft drinks (standard-rated), and takeaway food (reduced-rated) uses the Retail Scheme to calculate VAT on total daily takings rather than tracking every single sale.

• VAT Margin Scheme:

  • Applies to businesses that sell second-hand goods, antiques, art, and collectibles.
  • VAT is paid only on the profit margin (sale price – purchase price), not the full selling price.
  • Advantage: Reduces VAT liability and keeps goods more affordable for customers.
  • Example: A vintage car dealer purchases a car for £10,000 and sells it for £12,000. Instead of charging VAT on the full £12,000, VAT is only payable on the £2,000 profit margin.

With our All-Inclusive Accountancy service(£65/mo), you get expert advice on which scheme best fits your business model, whether you’re running a small Etsy shop or managing a multi-partner LLP.

8. Obligations, Risks, and Penalties

Once registered, VAT compliance becomes an ongoing responsibility. Here’s what you must do:

• Charge VAT:
  • Standard rate is 20%, with reduced rates of 5% or 0% for specific goods/services.
  • Example: Children’s clothing is zero-rated for VAT, whereas consultancy services are subject to the standard 20% rate.
• Submit Returns:
  • VAT returns are typically filed quarterly under HMRC’s Making Tax Digital (MTD) system.
  • Returns are submitted online, using compatible accounting software like Xero or FreeAgent.
• Risks and Penalties:
  • Late registration: HMRC will backdate VAT to the date you should have registered and may charge penalties plus up to 7% interest.
  • Incorrect VAT numbers: HMRC actively monitors for fraud, and using or issuing a fake VAT number can lead to severe fines.
    Example: An Amazon seller who registered six months late had to backpay £8,000 in VAT, along with £500 in penalties.

9. Checking and Displaying Your VAT Number

Once issued, your VAT number isn’t just for HMRC; it must be visible in the right places to maintain compliance and build trust.

• Verify VAT numbers: Use HMRC’s VAT Checker tool to confirm that a VAT number is genuine. This protects you from fraud or invalid invoices.
• Display your VAT number: It should be included on invoices, websites, emails, and other business documents. For e-commerce sellers on Etsy, Amazon, or Shopify, platforms often require a VAT number to remain compliant and transparent with customers.

10. Benefits of VAT Registration

Although not mandatory, VAT registration provides clear and tangible financial and reputational benefits:

• Reclaim VAT on expenses:
  • Example: If you pay £25,000 in Amazon FBA fees annually, you could reclaim around £5,000 in VAT.
• Boost credibility:
  • With over 68,000 e-commerce businesses using UK LTDs (Statista, 2024), a VAT number signals professionalism and stability, making clients and suppliers trust you more.
• Enable global trade:
  • The UK has over 130 double tax treaties, helping non-residents trade internationally without facing double taxation.
  • This makes UK-registered businesses especially attractive for cross-border e-commerce and consulting.

11. What you get in our VAT service

We split VAT help into two focused services so you get exactly what your business needs, so first: 

1. VAT registration to get your VAT number, and then
2. VAT filings & compliance so you stay tidy, legal, and penalty-free.

1. VAT Registration (one-time set-up)

Great for new UK or non-resident businesses beginning the VAT process.

What you get in this service:

• A certificate from HMRC
• VAT Number with an effective registration date
• First VAT returns due date
• Assessments
• Tracking & Updates(You're informed at each step: from submission, verification, to when HMRC issues your VAT registration number.)

Pricing:

• VAT Registration: £39.99(It’s a one-time charge)

Timing expectation:

• You spend a few minutes completing our registration form.
• HMRC usually issues a VAT number in ~30-45 days (subject to any extra verification).
• We do not guarantee faster HMRC approval, but our process prevents rejections and reduces delays.

2. VAT Filings & Ongoing Compliance

Once you’re VAT registered, staying compliant with HMRC is just as important. We provide ongoing VAT and accountancy services to keep your filings accurate, stress-free, and penalty-free. 

What We Offer:

1. All-Inclusive Accountancy Package

   • Complete Annual Accounts filing.
   • Corporation Tax filing.
   • PAYE for up to 3 employees.
     
     Pricing:
     • All-Inclusive Accountancy: £65/month
     • Add VAT filing as extra: +£29/month(if VAT registered.)
     • Bookkeeping & management accounts: £20/hour

2. Single Services (for businesses that don’t want a monthly plan)

   • Quarterly VAT Filing: £85/quarter (£340/year)
   • Only Corporation Tax filing: £450(For small accounts)
   • Payroll services (up to 3 employees): £180/year

Bonus Perk:
Get Xero FREE for 6 months with any accountancy package.

Xero helps you:

• Automate invoicing & payments.
• Track VAT in real time.
• Simplify reconciliation across marketplaces and currencies.

You can choose our comprehensive accountancy package for all-in-one support or pick individual services, whether it’s just VAT filing or full accountancy coverage — the choice is yours.

12. FAQs About VAT Registration

Got questions? We’ve got answers:

• What does "Inclusive of VAT" mean?
  A VAT-inclusive price indicates that the VAT (Value Added Tax) is included in the total amount shown. For example, if a product is priced at £120 including VAT at 20%, the base price is £100 and the VAT amounts to £20.
   
• What does "VAT Registered" mean?
  Being VAT registered means your business has officially signed up with HMRC (or through a formation agent like FormationsHunt) to collect VAT on goods or services you sell. You’ll charge VAT on sales, reclaim VAT on purchases, and submit VAT returns regularly. Registration becomes mandatory once your turnover exceeds the UK VAT threshold, but many businesses choose to register voluntarily to enhance their professional image and reclaim input VAT.
   
• What is my VAT Number?
  A VAT number is a unique identifier HMRC assigns to every VAT-registered business.It typically starts with 'GB' followed by nine digits (e.g., GB987654321). You’ll find it on your VAT registration certificate, invoices, or official correspondence from HMRC. If you register through FormationsHunt, we’ll secure your VAT number and send you the confirmation as soon as HMRC approves your application.
   
• How to get a VAT number in the UK?
  Once you meet the criteria, you’ll receive your VAT number after submitting your registration through HMRC. To avoid delays and paperwork, FormationsHunt handles the process online for you, ensuring accuracy, faster turnaround, and peace of mind.
  We ensure compliance with All-Inclusive Accountancy (£65/mo, includes VAT, corporation tax, PAYE), keeping you penalty-free.
   
• How to Check a VAT Number in the UK:
  Verifying a VAT number is crucial to ensure your suppliers or clients are genuinely VAT-registered. In the UK, you can:
  1. Use HMRC’s online VAT number checker.
  2. For EU businesses, confirm through the VIES(VAT Information Exchange System).
  
  Always verify before reclaiming input VAT; invalid numbers could lead to HMRC penalties or disallowed claims. If you’ve already applied for VAT registration and are still waiting, checking when you can expect a reply from HMRC is equally important, as delays may affect invoicing and compliance.
   
• How to Become VAT Registered?
  To register for VAT, you need to apply online with details such as your Unique Taxpayer Reference (UTR), business turnover, and type of business activity. While HMRC provides a portal, the process can be confusing and may delay approval if done incorrectly. The faster way is to use FormationsHunt’s VAT Registration Service, where we handle the process for you and ensure everything is completed correctly.
   
• How to Calculate VAT in the UK?
  The current standard VAT rate in the UK is 20%. To calculate VAT:
  
  Add VAT: Multiply the net price by 1.20 (e.g., £100 × 1.20 = £120).
  Extract VAT: To calculate the net price, divide the gross price by 1.20, then subtract the result from the gross price (e.g., £120 ÷ 1.20 = £100 net, £20 VAT).
  FormationsHunt also provides business support to help you manage VAT calculations more easily.
   
• How to Check a UK VAT Number?
  You can check if a VAT number is valid using the VIES (VAT Information Exchange System) or HMRC’s VAT online checker. However, many businesses find it easier to get guidance through a formation agent. At FormationsHunt, we help verify VAT numbers and make sure your invoices and compliance documents meet HMRC’s requirements.
   
• What is the Current VAT Rate in the UK?
  As of 2025, the UK VAT rates are:
  • Standard rate: 20% (most goods and services)
  • Reduced rate: 5% (e.g., home energy, children’s car seats)
  • Zero rate: 0% (e.g., most food, books, children’s clothes)

       Businesses need to apply the correct rate to avoid penalties. We ensure your VAT registration and filings stay compliant with the latest HMRC rules.

• Do all businesses need a VAT number? 
  No, only if your turnover exceeds £90,000 or you’re a non-resident selling to UK customers. Exempt businesses (e.g., healthcare) are excluded.
   
• Can non-residents register for VAT? 
  Yes, it's often required even if your sales are below £90,000 when selling in the UK. FormationsHunt handles this for you.
   
• Can I deregister later? 
  Yes, if your turnover falls below £88,000, you can apply to deregister.
   
• What happens if I register late? 
  You’ll owe backdated VAT plus fines (up to 7% interest). FormationsHunt’s compliance services (VAT only: £29/mo or All-inclusive: £65/mo) prevent this.
   
• How long does registration take? 
  Up to 30-45 days with HMRC(Her Majesty's Revenue and Customs), but FormationsHunt speeds it up with error-free applications.

12. Conclusion: Get Your VAT Number with FormationsHunt

VAT registration is mandatory at £90,000 turnover, but voluntary registration can save £1,000s and boost credibility. Whether you’re a non-resident, freelancer, e-commerce seller, or growing brand, you can launch an LTD or LLP with ease. FormationsHunt provides tailored Business Packages to fit every stage of growth, from Digital, Privacy, Professional, and All-Inclusive Packages to specialised options like CIC, LLP, and PLC formations.

For international founders, our Non-Resident Package (£169.99) is a complete setup — including VAT registration, a UK registered office, banking solutions, and even a company secretary service. If you’re focused on online selling, our E-Seller Package (£84.99) is built for Etsy, Amazon, and e-commerce entrepreneurs — with optional add-ons like a £99 logo design and a professional website (£49.99 × 6 months) to strengthen your digital brand.

Check your turnover with our VAT threshold tracker and get started at Formationshunt in just 3–6 hours. You can also explore our UK Company Formation Service for a complete business setup.

Bonus: VAT Thresholds Globally

This table gives a quick comparison of VAT thresholds across major countries, showing why the UK stands out as one of the most business-friendly destinations for global founders.