Hitting £90,000 in rolling 12-month turnover is a milestone. A sign your creative business is growing. But it also triggers a very real obligation: you must register for VAT.
If this is the first time you’ve crossed the threshold, it can feel confusing, admin-heavy, and slightly terrifying. Don’t worry. Here’s what actually happens, how long it takes, what you should (and shouldn’t) do, and how an accountant can help you avoid the pitfalls.
VAT registration isn’t based on tax years or calendar years. It’s a rolling 12-month calculation. So you look back at the last 12 months, every month, and check whether your taxable turnover has exceeded £90,000.
Once you cross the line, you must tell HMRC within 30 days.
If you’re not already tracking this monthly, don’t worry. Most creatives aren’t. This is one of the first things I check when onboarding a client.
You submit your registration online (or your accountant does it for you).
Current processing times are around 3 weeks.
Sometimes it’s quicker; occasionally it’s longer if HMRC have questions or need to run further checks.
During this waiting period, you are technically already VAT-registered from your effective date of registration, you just haven’t received your VAT number yet.
This is where things can get messy if you don’t know the rules.
This is one of the biggest panic moments for creatives.
Here’s the correct approach:
You deliver the work, you let your client know your VAT registration is in progress, and wait for your VAT number before invoicing.
In order to expedite payment, you can send an invoice (with the additional 20% added if you choose) while waiting, but you cannot describe that additional amount as VAT, and your client is not obliged to pay it.
You should state on the invoice:
Once your VAT number arrives, you can issue a second invoice - either to replace the proforma, or to charge for the additional VAT element only.
Do not charge VAT before you have a VAT number. You can’t legally show it on the invoice yet.
You can finally:
Your accountant should walk you through this and, importantly, test your setup so your first return doesn’t become a detective mission.
Especially overseas digital suppliers?
A lot of creatives use digital tools where the supplier is based overseas, such as OpenAI, Framer, Figma, MotionArray, Vimeo, Notion, Google Workspace etc.
Once you’re VAT-registered, this may change how they invoice:
Many EU-based subscription services should stop charging you their local VAT once you give them your UK VAT number.
If you don’t do this, you’ll end up paying foreign VAT you can’t reclaim. A pure cost to your business.
Most don’t charge VAT at all, which means the reverse charge applies. Your accountant will handle the VAT accounting for these. You just need to make sure the invoices are correct and that your books are set up for reverse-charge transactions.
However, some might assume that until you had a VAT number you were a consumer rather than a business. Which means they may have been adding UK VAT to their invoices even though they shouldn't.
If you now notify them you are VAT registered they should stop adding VAT to their invoices.
It’s a rolling 12 months, not April–April or January–December.
HMRC really don’t like this.
Especially Adobe, Google, Notion, Dropbox, Canva, etc.
Incorrect VAT means:
Typical issues:
All easy to fix, but only if you know what you’re looking for.
If you tell HMRC late, they can charge penalties and back-date VAT on past invoices.
VAT isn’t just an extra 20% line on your invoice. It affects:
A good accountant will:
If your business is growing, getting this right early saves a lot of pain later.
VAT is one of those moments where your business grows up. Yes, there are rules. Yes, the admin steps up. But once everything is set up properly, most creatives barely notice a difference.
And often — especially if most of your clients are VAT-registered agencies or production companies — VAT becomes a neutral cashflow process, not an extra cost.
Handled properly, it shouldn’t get in the way of your creativity.
If you’d like help navigating this (or you’ve just realised you’re creeping towards the threshold), send us a message. We can make the whole process painless — and make sure you stay on the right side of HMRC while your business keeps growing.