Incorporating a company is only the beginning of the tax setup process. Once a UK business starts trading, two separate HMRC registrations may become relevant: Corporation Tax registration for the company itself, and VAT registration if taxable turnover reaches the legal threshold or the business chooses to register voluntarily. The triggers and deadlines are different, so treating them as separate jobs helps prevent missed obligations.
For a new limited company, the practical sequence is usually simple: confirm when the company became active, make sure HMRC has issued its Unique Taxpayer Reference, complete the Corporation Tax setup, then monitor taxable turnover continuously for VAT purposes.
Corporation Tax and VAT registration are different
Corporation Tax applies to the taxable profits of limited companies and certain other organisations. A company is not necessarily active for Corporation Tax simply because it has been incorporated. HMRC expects an active company to provide the relevant Corporation Tax information within three months of the start of its Corporation Tax accounting period. Business activity can include buying or selling, advertising, employing someone or renting property for business purposes.
VAT works differently. Registration is driven mainly by taxable turnover rather than profit. The current UK VAT registration threshold is £90,000. A business must normally register if its taxable turnover for the previous 12 months goes over that figure, or if it expects taxable turnover to exceed £90,000 in the next 30 days. Voluntary registration is also possible below the threshold.
This means a loss-making company can still need VAT registration because VAT looks at taxable sales, while a profitable small company may be registered for Corporation Tax but remain outside compulsory VAT registration.
When to register for Corporation Tax
For most newly formed UK limited companies, the Corporation Tax clock starts when the business becomes active rather than simply on the incorporation date. HMRC says an active company should notify it within three months of starting its tax accounting period.
HMRC normally sends a 10-digit Unique Taxpayer Reference, or UTR, to the company’s registered office after incorporation. The UTR is needed when adding Corporation Tax services to the business tax account. If it has not arrived within 15 working days of registering the company, GOV.UK provides a route to request it.
What you will normally need
- Your Companies House company registration number.
- The company’s 10-digit UTR.
- The date the company started doing business.
- The date the first accounts are expected to be made up to.
- Access to the company’s Government Gateway or business tax account.
If you are still completing the setup process, how to register a limited company in the UK is a useful related topic to review alongside the tax steps.
How the VAT threshold works
The £90,000 VAT threshold is based on taxable turnover, not profit and not the amount of money left in the business bank account. Taxable turnover generally covers sales that are not VAT-exempt or outside the scope of VAT, and it includes zero-rated supplies.
The crucial point is that the standard test looks backwards over a rolling 12-month period. It is not limited to your accounting year or the April-to-April tax year. Growing businesses should therefore check the previous 12 months regularly rather than waiting for year-end accounts.
If you have already crossed the threshold
If taxable turnover in the previous 12 months goes above £90,000, you generally have 30 days from the end of the month in which you exceeded the threshold to register. The effective date of registration is normally the first day of the second month after the threshold was exceeded.
If a large order will push you over
There is also a forward-looking test. If you realise that taxable turnover will exceed £90,000 during the next 30 days alone, you must register by the end of that 30-day period. In this case, the effective date is the date you first realised the threshold would be exceeded.
For example, imagine a consultancy has £62,000 of taxable turnover and then signs a £35,000 contract that will be delivered within the next few weeks. The owner should not wait for the annual accounts. The new contract may trigger the forward-looking VAT test, so the business should review its VAT position immediately.
How VAT registration works
Most businesses can register for VAT online. A limited company will usually need its company registration number, bank details, UTR, annual turnover and an estimate of taxable turnover for the next 12 months.
After registration, HMRC provides a nine-digit VAT registration number, confirms the effective registration date, and tells the business when its first VAT Return and payment are due. HMRC also signs businesses up for Making Tax Digital for VAT unless an exemption applies.
A business cannot show VAT as a separate VAT charge on invoices before receiving its VAT registration number. However, if the effective registration date has already begun, VAT may still be due to HMRC on sales made from that date. Businesses close to the threshold should therefore prepare pricing, invoicing and bookkeeping before registration becomes compulsory.
What changes after VAT registration
VAT registration creates ongoing reporting duties. VAT-registered businesses generally need compatible software to keep digital VAT records and submit returns under Making Tax Digital. VAT Returns are usually filed every three months, and the standard online filing and payment deadline is normally one calendar month and seven days after the end of the VAT accounting period.
Your bookkeeping should separate VAT collected on sales from VAT incurred on eligible business purchases. Cash-flow planning also matters because VAT collected from customers is not simply extra revenue available to spend.
If your business also needs local permissions, business licences and permits UK is a logical next compliance topic.
What happens after Corporation Tax registration
Once Corporation Tax services are active, the company will eventually need to calculate taxable profit, pay any Corporation Tax due and file a Company Tax Return when required. Even a company that makes a loss can still be required to file if HMRC has issued a notice to deliver a return.
For most companies outside special instalment rules, Corporation Tax is usually due nine months and one day after the end of the accounting period. The Company Tax Return deadline is normally 12 months after the end of that period. These are separate deadlines.
First-year timing can also be awkward because Companies House accounts may cover more than 12 months while a Corporation Tax accounting period cannot. Some new companies therefore need two Company Tax Returns to cover their first set of accounts.
For the ongoing side of compliance, small business accounting and tax deadlines is a useful internal follow-up.
A simple tax-registration routine
- Record the exact date the company begins business activity.
- Check that the Corporation Tax UTR arrives at the registered office.
- Complete the required Corporation Tax HMRC registration within the relevant three-month window.
- Track taxable turnover monthly using a rolling 12-month figure.
- Recheck VAT after winning an unusually large contract or experiencing a sharp sales increase.
- Prepare digital bookkeeping software before VAT registration becomes compulsory.
- Save effective registration dates and filing deadlines in a calendar shared with whoever handles the accounts.
This routine catches two common timing mistakes: assuming incorporation automatically completes Corporation Tax registration, and checking the VAT threshold only once a year.
Frequently asked questions
Do all new limited companies have to register for VAT?
No. Compulsory VAT registration generally depends on taxable turnover. A UK business must normally register when taxable turnover exceeds £90,000 over the previous 12 months or is expected to exceed £90,000 in the next 30 days. Voluntary registration is possible below the threshold.
How soon must a new company register for Corporation Tax?
An active limited company should tell HMRC within three months of the start of its Corporation Tax accounting period. The key trigger is the company becoming active for Corporation Tax purposes, not simply receiving its incorporation certificate.
Can I register for VAT before reaching the threshold?
Yes. A business can register voluntarily below the compulsory threshold. This may allow it to reclaim eligible input VAT, but it also brings VAT invoicing, digital record-keeping and return-filing obligations.
What happens if VAT registration is late?
A business that registers late can still be required to pay VAT on sales made from the date it should have been registered. HMRC may also impose a penalty depending on the circumstances.
Keep the registrations on separate checklists
The safest way to handle registering for VAT and Corporation Tax is to treat them as linked but distinct compliance tasks. Corporation Tax registration follows the point at which a limited company becomes active, while VAT registration is driven mainly by taxable turnover and can arise suddenly as sales grow.
The most useful habit is to record the trading start date, secure the UTR, complete the Corporation Tax setup promptly, and monitor a rolling 12-month VAT figure from the first sale onward. That keeps HMRC registration tied to real business activity instead of leaving tax compliance until the first year-end accounts are due.