There is one UK VAT registration threshold and it does not vary by legal form. A sole trader, a self-employed contractor, a partnership and a limited company all register when taxable turnover for the last twelve months goes over £90,000, or is expected to in the next thirty days. What does vary is what counts towards it, and that is where the real differences between these cases live.
One figure, several searches
Searches for a sole trader threshold, a self-employed threshold and a limited company threshold are all asking about the same £90,000. The distinction people are reaching for is usually about who the turnover belongs to rather than how much it is. A limited company is a separate legal person, so its turnover is its own and does not combine with its director's other trades. A sole trader is the person, so everything they trade as an individual is aggregated into a single threshold test.
Taxable turnover is broader than sales income
Taxable turnover is the total value of everything you sell that is not VAT exempt or out of scope. It includes zero-rated goods, reduced-rated goods and standard-rated goods; goods you hired or loaned to customers; business goods used for personal reasons; goods bartered, part-exchanged or given as gifts; services received from businesses in other countries that you had to reverse charge; supplies subject to the domestic reverse charge; and building work over £100,000 your business did for itself. Profit does not come into it at any point.
Two trades, one person, one threshold
A sole trader running a consultancy and a weekend trade adds both together, because the registration attaches to the individual. Splitting an activity between a person and a company to keep each under the threshold is a well-known arrangement and a well-known target: HMRC can direct that closely bound businesses be treated as one for VAT. If two activities share customers, premises, staff, equipment or a bank account, treat them as one for the purposes of this test and take advice before assuming otherwise.
Questions people ask about sole trader vat threshold
Is the VAT threshold different for a sole trader?
No. £90,000 of taxable turnover applies to a sole trader, a partnership and a limited company alike. Only what counts towards it differs, because a company's turnover is its own.
What is taxable turnover?
The total value of everything you sell that is not VAT exempt or out of scope, including zero-rated and reduced-rated goods, goods used personally, barters and gifts, and reverse-charge supplies.
Do two sole trader businesses each get their own threshold?
No. The registration belongs to the person, so both trades count towards one threshold. Splitting an activity to stay under it is something HMRC can direct against.