The short answer
You need to register for VAT once your taxable turnover goes over £90,000 in any rolling 12 month period, not a tax year, a rolling 12 months. Below that, you don't need to register, you don't charge VAT, and nothing on your invoice changes because of it.
A lot of sole traders assume registration is something you sort out early on, alongside things like choosing a business name or opening a business bank account. It isn't. It's purely a turnover trigger, and for most PTs, dog walkers, tutors, cleaners and tradespeople working solo, that threshold is further away than it feels.
What actually counts towards the £90,000
It's your total taxable turnover, the money coming in from your work, before any expenses or tax are taken off. It's not profit. If you're doing £100,000 of jobs a year but half of that goes on materials, fuel and tools, your VAT taxable turnover is still £100,000, not your take-home amount.
It's also a rolling 12 month check, not tied to the tax year. HMRC expects you to be watching your turnover for any trailing 12 month window, not just checking once a year at your tax return. In practice, most sole traders well under the threshold don't need to think about this often, but it's worth a quick check every few months if you're growing quickly.
What changes if you do register
Once registered, you charge VAT (usually 20%) on top of your prices, and your invoices need to show your VAT number, the VAT rate applied, and the VAT amount separately from the subtotal. You also need to file VAT returns, usually quarterly, and pay HMRC the difference between VAT you've charged and VAT you've paid on your own business expenses.
This is a genuine admin step up from being unregistered, which is part of why nobody wants to do it a moment before they need to. It's not just a checkbox, it changes your pricing, your invoicing, and your reporting obligations.
Can you register voluntarily, before you hit the threshold?
Yes, and some sole traders do, usually because most of their clients are VAT registered businesses who can reclaim the VAT anyway, so charging it doesn't make the sole trader less competitive on price. It also lets you reclaim VAT on your own purchases, tools, materials, fuel.
For most PTs, dog walkers, tutors and cleaners working directly with individual members of the public rather than VAT registered businesses, voluntary registration usually isn't worth it. It just adds 20% to your price for a client who can't claim any of it back, and it adds admin you don't need yet.
What happens if you go over and don't register
You're required to register within 30 days of realising you'll go over the threshold in the next 30 days, or within 30 days of the end of the month you went over it looking backwards. Missing this can mean a penalty, and HMRC can also backdate the VAT you should have charged, which usually comes out of your own pocket rather than the client's, since you can't retroactively add VAT to an invoice you already sent and got paid for.
The practical takeaway: if you're getting close, don't wait until your accountant mentions it at year end. Check your rolling 12 month turnover as you go.
How Cleared handles this either way
Whether you're VAT registered or not, Cleared builds your invoices correctly for your status. Below the threshold, your invoices stay simple, no VAT lines, no confusion. If you register, your invoices automatically switch to including your VAT number and the VAT breakdown, no manual template changes needed.
Frequently asked questions
Do I need to register for VAT as soon as I go self employed?
No. Registration is only required once your taxable turnover goes over £90,000 in a rolling 12 month period. Most sole traders never get close to this.
Is the £90,000 threshold based on profit or turnover?
Turnover, the total money coming in from your work before expenses. Profit isn't relevant to the VAT threshold.
Should I register for VAT voluntarily before I hit the threshold?
Usually only worth it if most of your clients are VAT registered businesses who can reclaim the VAT themselves. For sole traders working mainly with individual customers, it typically just adds cost without benefit.
What happens to my invoices if I do register?
They need to show your VAT number, the VAT rate, and the VAT amount separately from your subtotal. Cleared handles this automatically once you update your registration status.
What if I go over the threshold without realising?
You have 30 days to register once you know you're over, or will be shortly. It's worth checking your rolling 12 month turnover periodically rather than waiting for your annual tax return to notice.