VAT threshold (£90,000) for gig workers

What it is

The VAT registration threshold is the level of taxable turnover at which you must register for VAT and start charging it. From 1 April 2024 the threshold is £90,000 of taxable turnover in any rolling 12-month period. The deregistration threshold is £88,000. The rules are in the Value Added Tax Act 1994. If you cross £90,000 you must notify HMRC and register within 30 days of the end of the month you crossed it. Miss that window and HMRC can back-register you and charge VAT on turnover you have already taken.

How it applies to gig workers

Most gig workers sit nowhere near £90,000. A full-time Uber driver on £42,000 turnover plus £8,000 from Deliveroo is at £50,000, well below the line. The threshold only becomes a serious risk for heavy multi-platform drivers or those combining gig work with other sole-trader income.

Your turnover for the threshold test is what you supply, so for most Uber, Bolt, Amazon Flex and food delivery arrangements in 2025-26 that is the net amount the platform pays you, not the gross fare or gross order value the customer paid. Uber being VAT-registered and accounting for VAT on passenger fares is Uber's problem, not yours. It does not automatically register you for VAT. It does not let you reclaim VAT on fuel or repairs. It does not change the £90,000 threshold.

Voluntary VAT registration is almost always a bad deal for gig workers. Your customers are passengers and consumers who cannot reclaim VAT, so you either absorb 20% or price yourself out. Platforms control the prices you show the end-customer, so you cannot usually add 20% on top. Input VAT on fuel and servicing rarely beats the output VAT you would owe. The Flat Rate Scheme's courier rate is about 10% of VAT-inclusive turnover with a 1% first-year discount, but if you spend less than 2% of turnover (or under £1,000 a year) on relevant goods, HMRC treats you as a limited cost trader and forces you onto 16.5%, which usually wipes out any benefit.

Real crossing example. An Uber driver on £55,000 plus £20,000 Amazon Flex plus £18,000 contract courier work hits £93,000 across a 12-month window ending August 2025. He must register by 30 September 2025. If he does nothing, HMRC can back-register him, demand VAT on turnover he has already taken at fixed fares, and add penalties.

What you should do about it

• Add up rolling 12-month self-employed turnover from every platform plus any other sole-trader income every month once you are near £70,000.
• Use the turnover figure on your SA103 (net platform payouts) as your default threshold monitor unless a contract clearly says different.
• Ignore TikTok claims about voluntary VAT being a "fuel hack". Get real numbers before registering early.
• If you are genuinely near £90,000, speak to an accountant who understands gig work before you cross it.
• If you have already crossed the threshold, contact HMRC or an adviser within the 30-day window to minimise penalties.

Last reviewed

19 April 2026

Internal links this page emits (3-5):

• self assessment deadlines 2026 — anchor: "Self Assessment deadlines"
• mtd itsa — anchor: "MTD for Income Tax"
• vat threshold tracker — anchor: "VAT threshold tracker"
• uber 3 to 49 percent service fee — anchor: "Uber's service fee"
• expenses gig workers — anchor: "gig worker expenses"

Primary source used:

• Research/S2-tax/2.5-vat-for-gig-workers.md