How to Register Your Limited Company for VAT

If you’re a director or business owner of a UK limited company (Ltd), VAT registration is not something you can leave until “later” and hope it sorts itself out. For many companies, it becomes a legal requirement as soon as your taxable turnover passes the VAT threshold — and once that happens, HMRC expects you to act quickly. Even if you’re still below the threshold, VAT registration can still be a smart commercial move, depending on how your business operates and who your customers are.

At its simplest, a VAT registration number for a company is your confirmation that HMRC recognises your Ltd as VAT-registered. It gives you the right to charge VAT on taxable goods and services and, just as importantly, to reclaim VAT on many business expenses — things like professional fees, equipment, software, marketing costs, and in some cases vehicles and premises costs. That reclaim can make a noticeable difference to cash flow, especially for newer businesses that have spent heavily on setup costs.

But VAT registration isn’t only about tax mechanics. In the real world, it affects how your company is perceived. Many corporate clients and procurement teams expect suppliers to be VAT-registered, and some won’t engage at all without a VAT number on invoices. For B2B businesses in particular, VAT registration can signal that your company is established, compliant, and ready to scale — even if your turnover is still below the compulsory threshold.

This guide is written specifically for limited companies, because the process and the practical considerations are not identical to those for sole traders. For example, directors often have extra responsibilities around company records, banking details, authorisations, and compliance systems. We’ll walk you through how to get a company VAT number, when registration is mandatory versus when voluntary registration makes sense, what information HMRC will ask for, and how the registration process works in practice — from setting up your Government Gateway access to receiving your VAT certificate.

We’ll also cover what happens after registration, because that’s where many directors get caught out. Once your VAT number is issued, you’ll need to think about things like when you can start charging VAT, how to issue compliant VAT invoices, how Making Tax Digital (MTD) changes your record-keeping, and how often you’ll be expected to submit VAT returns. Throughout the guide, we’ll point you to deeper, step-by-step resources so you can drill into each topic and handle VAT registration confidently — without guessing, rushing, or risking penalties.

VAT Registration for Limited Companies in the UK (Overview)

Key VAT Registration Concepts for Ltd Companies

What is a VAT Registration Number (VRN)?

A VAT Registration Number (VRN) is a unique reference issued by HMRC when your limited company becomes VAT-registered. It is more than just a number — it is formal confirmation that HMRC recognises your company as part of the UK VAT system and that specific legal obligations now apply.

Once your company has a VAT number, it is authorised to:

• charge VAT on taxable goods and services supplied to customers;
• reclaim VAT on qualifying business expenses and capital purchases;
• submit VAT returns and comply with UK VAT legislation on an ongoing basis.

In the UK, a VAT number usually consists of 9 digits and is often shown in the format GB 123 4567 89. This number must appear on VAT invoices, credit notes, and certain contractual or commercial documents. Using an incorrect or missing VAT number can invalidate invoices and lead to problems with customers or HMRC, particularly where VAT is being reclaimed.

When does a limited company need to register for VAT?

There are two main routes by which a UK limited company can become VAT-registered, and understanding the difference is critical.

Mandatory VAT registration
Your company must register for VAT when:

• its taxable turnover exceeds £90,000 in any rolling 12-month period, or
• it expects to exceed the £90,000 threshold within the next 30 days alone, based on firm contracts or confirmed sales.

Once either trigger is met, HMRC requires registration within strict time limits. Missing these deadlines can result in backdated VAT liabilities, interest, and penalties, even if you were unaware you had crossed the threshold.

Voluntary VAT registration
Limited companies may also choose to register voluntarily, even when turnover is below the threshold. This is common for businesses that:

• trade mainly B2B, where customers can reclaim VAT;
• incur high VATable costs, such as professional services, equipment, software, or marketing;
• want to improve commercial credibility with larger clients, suppliers, or lenders.

Voluntary registration can offer real advantages, but poor timing can also create unnecessary administration or cash-flow pressure. Choosing when and whether to register should always be a considered decision rather than a default step.

Benefits and disadvantages of VAT for limited companies

VAT registration brings both opportunities and responsibilities, and it’s important to understand both sides.

Key benefits include:

• the ability to reclaim VAT on eligible business expenses and capital purchases;
• meeting VAT requirements imposed by corporate clients, tenders, and procurement processes;
• presenting a more established and professional image, particularly in competitive B2B markets.

Potential drawbacks include:

• additional administrative work and record-keeping obligations;
• the need to file quarterly VAT returns under Making Tax Digital (MTD);
• possible cash-flow pressure if VAT collected is not managed and set aside properly.

VAT is neither inherently “good” nor “bad”. Its impact depends on your pricing structure, customer base (B2B vs B2C), cost profile, and how well VAT is integrated into your financial systems.

How to get a VAT number: the process at a glance

For most limited companies, the VAT registration process follows a structured and predictable path:

1. Confirm whether registration is mandatory or voluntary
2. Gather company, director, financial, and banking details
3. Create or access a Government Gateway account
4. Complete the VAT1 online registration form
5. Select an appropriate VAT accounting scheme
6. Submit the application to HMRC
7. Respond to any verification or clarification requests
8. Receive your VAT registration certificate (VAT4)

In straightforward cases, online applications are usually processed within 2–4 weeks. More complex situations — such as group structures, overseas ownership, or unusual trading activities — may take longer and involve additional HMRC checks.

What happens after VAT registration?

Once your VAT number is issued, your responsibilities do not end — they begin.

Your limited company must:

• charge VAT from the effective registration date shown on the VAT certificate;
• issue compliant VAT invoices that meet HMRC requirements;
• submit VAT returns digitally under Making Tax Digital (MTD);
• keep VAT records for at least six years;
• pay VAT due or claim refunds within HMRC deadlines.

Failure to meet these obligations can result in penalties, interest charges, delayed refunds, or HMRC enquiries, even if mistakes are unintentional.

VAT schemes available to limited companies

Most limited companies can choose from several VAT accounting schemes, including:

• Standard VAT Accounting (the default method);
• Flat Rate Scheme;
• Cash Accounting Scheme;
• Annual Accounting Scheme.

The most suitable scheme depends on factors such as turnover level, cost structure, cash-flow profile, and industry sector. Selecting the wrong scheme can increase VAT costs unnecessarily, while the right choice can significantly simplify compliance.

Other important considerations

Directors should also be aware of a number of related VAT issues that commonly arise, including:

• special situations, such as newly incorporated companies, group VAT registration, or company restructures;
• the true costs of VAT registration and ongoing compliance;
• common VAT mistakes that lead to penalties or rejected claims;
• deregistration rules if turnover falls below the threshold;
• when professional VAT support is advisable.

Each of these areas is explored in detail in dedicated, step-by-step guides linked from this page, allowing you to go deeper into the topics most relevant to your company.

VAT Registration Checklist for Limited Companies

Before you begin the VAT registration process, it’s worth taking the time to prepare properly. A well-prepared application is far more likely to be processed quickly and without follow-up questions from HMRC. This checklist is designed to help Ltd company directors and business owners make sure nothing important is missed before, during, and immediately after VAT registration.

Use it as a practical working document rather than a formality — many VAT delays and penalties arise simply because one of these steps was overlooked.

✔ Confirm your VAT position and timing

• Confirm company turnover calculation
  Review your taxable turnover using a rolling 12-month period, not just your financial year. This is one of the most common areas of error.
• Determine mandatory vs voluntary registration
  Establish whether you are legally required to register or whether voluntary registration would be beneficial for your business model.
• Identify the registration deadline (if mandatory)
  If the threshold has been exceeded, note the exact deadline to notify HMRC. Missing it can lead to backdated VAT and penalties.

✔ Gather company documentation

Make sure all statutory company details are accurate and consistent:

• Certificate of Incorporation
• Company Registration Number (CRN)
• Companies House authentication code
• Proof of registered office address

Inconsistencies between Companies House and HMRC records can delay registration.

✔ Collect director information

HMRC requires personal details for directors as part of identity verification:

• Full names and home addresses of all directors
• National Insurance numbers (where applicable)
• Identification documents (passport or driving licence)

Ensure details match official records to avoid verification issues.

✔ Prepare financial records

HMRC will assess whether your turnover figures are reasonable and supported by evidence:

• Turnover figures for the last 12 months (if trading)
• Monthly breakdown if the VAT threshold has been exceeded
• Expected annual turnover projections
• Evidence of trading activity (invoices, contracts, bank activity)

For newly incorporated companies, realistic projections and supporting documentation are particularly important.

✔ Obtain banking details

VAT payments and refunds must go through a company bank account:

• Company bank account details
• Sort code and account number
• Recent bank statement showing business activity

HMRC will not usually accept personal bank accounts for VAT purposes.

✔ Set up online access

• Create or access a Government Gateway account
  This is required to register for VAT and to manage VAT returns online.

✔ Make key VAT decisions

• Decide on a VAT accounting scheme
  Choose between standard VAT accounting, the Flat Rate Scheme, Cash Accounting, or Annual Accounting, based on your business profile.
• Choose the VAT registration effective date
  This determines when you must start charging VAT and reclaiming VAT.

✔ Plan for customer and systems impact

• Plan how to communicate VAT registration to customers
  Consider pricing changes, updated quotes, and contract wording.
• Research Making Tax Digital (MTD) software options
  Ensure your accounting system is MTD-compatible before registration goes live.

✔ Complete and submit the application

• Complete the online VAT1 form carefully
• Review the application thoroughly to avoid errors or omissions
• Submit the application
• Note and save the reference number provided after submission

✔ Track progress

• Set up tracking for VAT certificate arrival
  Online applications are typically processed within 2–4 weeks, but delays can occur if HMRC requests additional information.

✔ Plan VAT implementation after approval

VAT registration is not complete until your systems are ready:

• Update invoice templates to include VAT details
• Adjust price lists if VAT is being passed on to customers
• Configure accounting software for VAT and MTD
• Provide basic VAT training for staff involved in invoicing or bookkeeping

Final Tip for Directors

Treat VAT registration as a project, not a single form. Proper preparation reduces the risk of HMRC queries, delayed registration, cash-flow issues, and compliance mistakes after your VAT number is issued.

Frequently Asked Questions About VAT Registration for Limited Companies

Below are clear, practical answers to the questions UK limited company directors ask most often about VAT registration. The explanations go beyond short definitions and reflect how VAT works in practice, not just in theory.

How do I get a VAT number for my limited company?

You obtain a VAT number by registering your company with HMRC, usually online through a Government Gateway account. The process involves completing the VAT1 form, providing company and director details, turnover information, and choosing a VAT accounting scheme. Once HMRC approves the application, they issue a VAT registration number and certificate.

How long does it take to register a limited company for VAT?

Most straightforward online applications are processed within 2–4 weeks. However, registration can take longer if HMRC requests additional information, if the company has complex ownership, overseas directors, unusual trading activity, or if projections need further clarification.

What is the VAT threshold for limited companies in 2025?

The VAT registration threshold is £90,000 of taxable turnover, calculated on a rolling 12-month basis. This is not based on your accounting year, so turnover must be monitored monthly to avoid missing the registration deadline.

Can a newly incorporated company register for VAT?

Yes. A newly incorporated company can register for VAT either because registration is mandatory or voluntarily. For voluntary registration, HMRC usually expects evidence of genuine intention to trade, such as contracts, invoices, marketing activity, or a business plan.

How many digits is a company VAT registration number?

A UK VAT registration number typically consists of 9 digits, often shown in the format GB 123 4567 89. This number must appear on VAT invoices and official VAT documents.

Is the company number the same as the VAT registration number?

No. The Company Registration Number (CRN) is issued by Companies House and identifies your legal entity. The VAT registration number is issued by HMRC and only exists if the company is VAT-registered. They serve completely different purposes.

Do all limited companies need to be VAT registered?

No. Only limited companies that exceed the VAT threshold or choose voluntary registration must register. Many small companies remain unregistered, while others register voluntarily for commercial or cash-flow reasons.

Can I register for VAT online for a limited company?

Yes. Online registration is the standard method and is suitable for the vast majority of limited companies. Paper registration is only used in limited or exceptional circumstances.

What documents do I need to register my Ltd company for VAT?

Typically, HMRC requires:

• company details and registration number,
• director information,
• turnover figures or projections,
• business activity details,
• company bank account information.

Supporting documents may be requested if the case is complex or the company is newly formed.

How much does it cost to register a limited company for VAT?

HMRC does not charge a fee for VAT registration. However, if you use an accountant or agent, professional fees may apply, depending on the complexity of the registration and advice provided.

Can I register for VAT before my company starts trading?

Yes. This is common where setup costs are high or early VAT recovery is important. You must be able to demonstrate a genuine intention to trade, supported by evidence such as contracts, quotes, or marketing activity.

What happens if my limited company exceeds the VAT threshold?

You must notify HMRC and register for VAT within the required deadline. If you fail to do so, HMRC can backdate your registration, require you to pay VAT you should have charged, and apply interest and penalties.

Can I use the Flat Rate Scheme for my limited company?

Yes, provided your company meets the eligibility criteria, including turnover limits. The Flat Rate Scheme can simplify VAT accounting but is not suitable for all business models, particularly those with higher costs.

Do I need to register for Making Tax Digital when I register for VAT?

Yes. Making Tax Digital (MTD) is mandatory for all VAT-registered businesses. This means you must keep VAT records digitally and submit VAT returns using compatible accounting software.

How do I find my limited company’s VAT number?

Your VAT number can be found on:

• your VAT registration certificate (VAT4),
• your HMRC online VAT account,
• submitted VAT returns,
• accounting software settings.

Can I check if another company is VAT registered?

Yes. You can verify another company’s VAT registration using HMRC’s online VAT number checker. This is especially important before reclaiming VAT on supplier invoices.

What is a VAT registration certificate (VAT4)?

The VAT4 certificate is the official document issued by HMRC confirming your VAT registration number, effective date, and VAT return periods. It should be kept with your company’s statutory records.

Can limited company directors register for VAT themselves?

Yes. Directors are allowed to complete VAT registration themselves without using an accountant. However, professional support can reduce errors, delays, and long-term VAT risks.

What are the responsibilities after VAT registration for a limited company?

After registration, your company must:

• charge VAT correctly,
• issue compliant VAT invoices,
• submit VAT returns on time,
• keep VAT records for at least six years,
• pay VAT due or claim refunds within deadlines.

How do I deregister my limited company from VAT?

You can apply for deregistration online if your company becomes eligible, for example if turnover falls below the deregistration threshold or taxable supplies cease. HMRC will confirm once deregistration is approved.

Need Professional Help with VAT Registration?

If you want to be confident that your VAT registration is done correctly, efficiently, and with the right VAT scheme from day one, professional support can save time, prevent costly mistakes, and reduce HMRC risk.

Audit Consulting Group – Accounting and Tax
+44 7386 212550
info@auditconsultinggroup.co.uk

We support UK limited companies with VAT registration, ongoing compliance, and VAT planning — from straightforward registrations to complex group, restructuring, and cross-border cases.