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Does zero-rated VAT count toward the VAT registration threshold? (UK)

Yes. Zero-rated sales are still taxable, just taxed at 0%, so they count toward the £90,000 VAT registration threshold. Exempt sales don’t. Use the checker below to see where you stand and what to do next.

£90,000registration threshold
12 monthsrolling, not calendar
0%still counts
Last updated

Quick checker

This checker is intentionally conservative. If you’re close to the threshold or unsure if something is zero-rated vs exempt, verify on GOV.UK or with an accountant.

1) What type of sales do you mostly make?

2) Your turnover (simple)

£
Standard, reduced and zero-rated sales together. Leave out exempt sales.

3) Practical goal

Your answer shows here.Answer the questions and press Check. After that, it updates as you change anything.
Updates as you type
Likely answer
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Your last 12 months against £90,000
Does it usually count toward the threshold?—

Next steps

    Key idea

    Zero-rated ≠ exempt. Zero-rated supplies are taxable supplies (VAT at 0%) and count toward the threshold. Exempt supplies are not taxable supplies and don’t count, but you also can’t usually reclaim VAT on costs linked to them.

    General information only. Not tax advice. If you’re close to the threshold or unsure about classification, confirm on GOV.UK.

    Common mistakes

    • Assuming “0% VAT” means “doesn’t count”: zero-rated sales are taxable and count toward taxable turnover.
    • Mixing up zero-rated and exempt (they are not the same thing).
    • Not tracking a rolling 12 months and only looking at a calendar or tax year.
    • Ignoring mixed supplies (some items taxable, some exempt).
    • Forgetting the 30-day test: one big expected order can mean you must register straight away.

    Zero-rated, reduced-rated and exempt at a glance

    TypeVAT chargedCounts toward £90,000?
    Standard-rated20%Yes
    Reduced-rated5%Yes
    Zero-rated0%Yes
    ExemptNoneNo
    Outside the scopeNoneNo

    If most of your sales are zero-rated

    You still have to register once you go over £90,000, but you can apply to HMRC for an exception from registration if most of what you sell is zero-rated. HMRC registers you if the application is refused. Many zero-rated businesses register anyway, because they then get a refund of the VAT on their costs.

    FAQ

    Do zero-rated sales count toward the VAT threshold?

    Yes. Zero-rated sales are taxable supplies taxed at 0%, so they count toward the £90,000 VAT registration threshold. Exempt sales don’t count.

    Do I have to register for VAT if all my sales are zero-rated?

    If your taxable turnover goes over £90,000 you must register, but you can apply for an exception from registration if most of your sales are zero-rated. You may prefer to register so you can reclaim VAT on your costs.

    How is the £90,000 threshold measured?

    On a rolling 12-month basis: at the end of each month, add up taxable turnover for the last 12 months. You must also register if you expect to go over £90,000 in the next 30 days alone.

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