I think I crossed the £90k VAT threshold a few months ago — what happens now?

Don't panic, but don't delay either — this is one of those issues that only gets more expensive the longer you leave it.

The rule is that you must register within 30 days of the end of the month in which your rolling 12-month taxable turnover went over £90,000. Your registration is then backdated: it takes effect from the first day of the second month after you crossed the threshold. So if you crossed it during June, your effective registration date is 1 August.

Yes, you owe HMRC the VAT on everything you invoiced from that effective date — even though you didn't charge it to your clients. That VAT comes out of your own pocket, which is why late registration hurts. HMRC can also charge a penalty depending on how late you are and how much is owed, plus interest on the late VAT.

Practical steps: work out exactly which month your rolling 12-month turnover first passed £90,000, then register online straight away on GOV.UK (search "register for VAT"). You'll be asked for the date you should have been registered. Keep clear records so your first VAT return covers the right period. And consider asking an accountant to review your figures and help you get set up on MTD-compatible software — all VAT returns must now be filed through software under Making Tax Digital.

Good advice above — here's a complementary angle worth checking before you assume the worst. First, re-run the threshold test properly: the £90,000 limit applies to *taxable* turnover only, which excludes any VAT-exempt income (GOV.UK defines it as everything you sell that isn't VAT exempt). If some of your design work was for overseas clients or fell into an exempt category, your figure may be lower than your spreadsheet suggests.

Second, you may be able to apply for an *exception from registration* if the breach was a one-off spike and you can show HMRC your taxable turnover will stay below the £88,000 deregistration threshold for the next 12 months. That avoids backdated VAT entirely — worth exploring if your busy spell has genuinely passed.

On client invoices: you can't go back and add VAT to invoices issued before your registration date — you should have charged it at the time. Most freelancers absorb the cost, but if any clients are VAT-registered businesses themselves, a frank conversation can sometimes recover part of it, since they can reclaim it. Either way, check your contracts and pricing now so the VAT burden sits where it belongs going forward.