VAT for self-employed UK 2026: when to register, how it works and how to file
VAT is one of the most confusing parts of running a UK business. This guide explains exactly when you must register, how to charge and reclaim VAT, and how to file your VAT return — with no jargon.
When must you register for VAT?
You must register for VAT when your VAT-taxable turnover exceeds £90,000 in any rolling 12-month period (2026 threshold). This is not your profit — it's your gross income from VAT-taxable sales. You have 30 days from the point you exceed the threshold to register.
You can also register voluntarily if your turnover is below the threshold. This can be advantageous if your clients are VAT-registered businesses (they can reclaim the VAT you charge), and it lets you reclaim VAT on your own business purchases.
Standard VAT rates in the UK 2026
| Rate | % | When it applies |
|---|---|---|
| Standard | 20% | Most goods and services |
| Reduced | 5% | Home energy, children's car seats, sanitary products |
| Zero | 0% | Food, books, children's clothing, public transport |
How to charge VAT on invoices
Once VAT-registered, every invoice to a UK client must show: your VAT registration number, the date of supply, a description of goods/services, the net amount (excluding VAT), the VAT rate applied, the VAT amount, and the total amount including VAT.
The Flat Rate Scheme — is it right for you?
The Flat Rate Scheme (FRS) simplifies VAT for small businesses. Instead of calculating VAT on every transaction, you pay HMRC a fixed percentage of your gross (VAT-inclusive) turnover. Rates vary by trade sector — IT contractors pay 14.5%, consultants pay 14%, journalists pay 12.5%.
In the first year of registration, you get a 1% discount on your flat rate. Many freelancers save money on the FRS compared to standard VAT accounting — especially if their costs are low (less VAT to reclaim on purchases).
Filing VAT returns
VAT returns are typically filed quarterly online. You must file within one month and 7 days after the end of each quarter. Making Tax Digital (MTD) for VAT is now mandatory — you must use compatible software to keep digital records and submit returns. HMRC no longer accepts manual spreadsheet submissions directly.
Reclaiming VAT on purchases
If you're VAT-registered, you can reclaim VAT on business purchases — equipment, software, professional services. You need a valid VAT invoice from the supplier showing their VAT number. You cannot reclaim VAT on entertaining clients or on items where there's no business purpose.