Incorporating a company is only the start of its tax setup. Once the business begins operating, two registrations often need attention: Corporation Tax and, where required, VAT. They are separate HMRC obligations with different triggers, so completing one does not automatically deal with the other.
For most UK limited companies, Corporation Tax becomes relevant when the company becomes active. VAT registration, by contrast, depends mainly on taxable turnover. Understanding that difference helps a new business register at the right time without taking on unnecessary administration too early.
Corporation Tax registration starts when the company becomes active
A newly incorporated company is not necessarily active for Corporation Tax from day one. If it has not started doing business, it may be dormant for Corporation Tax purposes. HMRC says activities such as buying, selling, advertising, renting a property or employing someone can indicate that the company has started doing business.
If Corporation Tax was set up as part of the online incorporation process, there may be no separate registration step to repeat. If it was not, the company normally needs to add Corporation Tax services to its business tax account when it starts doing business.
An active company within the charge to Corporation Tax must tell HMRC within three months of the start of its tax accounting period. Keep a clear record of the date business activity begins, because that date can affect the first accounting period and later deadlines.
What you will usually need
For corporation tax registration or adding the service to your account, you will commonly need the company registration number, the date the company started doing business and its Corporation Tax Unique Taxpayer Reference, or UTR, where required. HMRC issues a UTR for a limited company, and it can be requested again if misplaced.
VAT registration follows a different test
VAT registration UK rules are based primarily on taxable turnover rather than incorporation or profit. As of 2026, the compulsory VAT threshold is £90,000. You must normally register if total taxable turnover for the previous 12 months goes over £90,000, or if you expect taxable turnover to exceed £90,000 in the next 30 days alone.
The first test is rolling, so it should be checked throughout the year rather than only at the financial year end. Taxable turnover generally covers sales that are not VAT-exempt, including zero-rated supplies.
If the rolling 12-month total first goes over the threshold, you generally have 30 days from the end of that month to register. The effective date of registration is normally the first day of the second month after the threshold was exceeded.
The forward-looking test works differently. If you realise that taxable turnover will exceed £90,000 in the next 30 days, you must register by the end of that 30-day period. Your effective registration date is the date you first realised the threshold would be exceeded.
A practical example
Imagine a consulting company that starts trading in August. It should deal with Corporation Tax because it is active, but it does not automatically need VAT registration simply because it has incorporated. If its rolling taxable turnover later reaches £92,000 for the first time in March, the VAT threshold has been crossed and the company should calculate the registration deadline from that point.
Now suppose the company is still below the rolling threshold but signs a contract that means it expects more than £90,000 of taxable turnover during the next 30 days. The forward-looking VAT rule can trigger registration immediately. This is why monitoring only year-to-date revenue is not enough.
Can you register for VAT before reaching the threshold?
Yes. A business below £90,000 of taxable turnover can usually choose voluntary registration. This can be useful where customers are mainly VAT-registered businesses and the company has significant VAT-bearing costs, because eligible input VAT may be recoverable.
What happens after VAT registration?
HMRC provides a nine-digit VAT registration number, an effective registration date and information about the first VAT Return and payment. The VAT number must be included on VAT invoices.
New VAT-registered businesses are generally enrolled automatically into Making Tax Digital for VAT unless exempt or applying for an exemption. This means keeping the required VAT records digitally and using compatible software to submit VAT Returns.
Pay close attention to the effective registration date. VAT can become due from that date even if the VAT number arrives later, so invoices and accounting records may need careful handling while the application is being processed.
What happens after Corporation Tax registration?
Once Corporation Tax services are active, the company is responsible for maintaining records, calculating taxable profits, paying any Corporation Tax due and filing its Company Tax Return.
For companies outside the instalment-payment rules, Corporation Tax is usually due nine months and one day after the end of the accounting period. The Company Tax Return is normally due 12 months after the end of that period. First-year dates can be more complicated because a Corporation Tax accounting period cannot exceed 12 months.
A simple registration sequence for a new company
Record the date the company actually begins business activity. Confirm whether Corporation Tax was set up during incorporation; if not, add the service to the business tax account and make sure HMRC is notified within the required period.
At the same time, track taxable turnover on a rolling 12-month basis for VAT. Do not wait for the financial year end. If turnover approaches £90,000, review it regularly and consider whether a large contract could trigger the separate 30-day forward-looking test.
Frequently asked questions
Do all new limited companies need to register for VAT?
No. Incorporation alone does not create a VAT registration requirement. Registration is generally compulsory when taxable turnover passes the £90,000 threshold under the rolling 12-month test or is expected to exceed £90,000 in the next 30 days, although special rules can also apply.
When do I need to register for Corporation Tax?
If the company is active and Corporation Tax was not already set up during incorporation, deal with the HMRC registration when the company starts doing business. HMRC requires an active company within the charge to Corporation Tax to notify it within three months of the start of the relevant accounting period.
Can a dormant company wait before dealing with Corporation Tax?
A company that has not started doing business is usually dormant for Corporation Tax purposes. Once it becomes active, its HMRC position should be updated promptly and Corporation Tax services added if they were not already set up.
Is the VAT threshold based on profit?
No. The VAT threshold is based on taxable turnover, not profit. A company can have low profits and still be required to register for VAT if its taxable sales exceed the registration threshold.
Keep the two tax registrations separate
Treat Corporation Tax and VAT as two parallel checks. Corporation Tax follows the point at which the company becomes active; VAT follows taxable turnover and specific registration rules. Record the trading start date, monitor the rolling VAT figure and keep HMRC details organised from the beginning. That simple discipline makes later filing, invoicing and tax payments easier to manage.