The first £100k in a cleaning business is harder than the second. And the second is harder than the third.
That sounds backwards. Surely bigger numbers are harder? But ask any cleaning business owner who’s made it well past £100k, and most will tell you the same thing: the climb to that first six figures, and just beyond it, was the toughest part.
It’s not because the work gets harder. It’s because £100k is where almost everything about your business has to change at the same time.
The sum in short
In this example, a residential business with £88,000 of sales grows to £110,000, registers for VAT and keeps about £91,700. That’s £22,000 more in sales and just £3,700 more to pay for the extra cleaners, hours and costs. The way through is to plan for VAT a year or two before you reach the threshold.
Why is £100k so hard?
You’re too big to run it alone, and too small to afford help
At £100k, your business is genuinely complicated. You’ve probably got several cleaners, lots of customers, a busy rota and real money moving in and out.
But the business often isn’t making enough profit yet to pay for the management, admin support and systems that complexity needs. So the owner fills every gap personally.
This is the most exhausting stage of the whole journey. The business needs a team leader, office support and proper systems, but you can’t quite afford them. So you become all of them.
Your own pay often doesn’t grow
Here’s a harsh truth: many owners take home less at £100k than they did at £60k.
As the business grows, costs grow too. You need more wages, more insurance, more fuel, more software and, eventually, someone to help you manage. Unless your pricing and margins keep up, turnover rises while your own income stays flat, or falls.
It’s incredibly demoralising to work harder than ever and have less to show for it.
VAT arrives in the middle of it
The VAT registration threshold is currently £90,000. For a residential cleaning business, that lands right in the middle of the climb to £100k, and it’s one of the biggest reasons businesses stall.
When you must register
You have to register for VAT if your taxable turnover goes over £90,000 in any rolling 12 months, or if you expect it to go over £90,000 in the next 30 days alone. Taxable turnover is the total value of everything you sell that isn’t exempt from VAT, including standard-rated, reduced-rated and zero-rated sales. It’s sales, not profit.
It’s a rolling test, not a tax-year one, which is why it so often catches people by surprise. There’s no single date in the diary to plan around, and once you’ve crossed it there’s a deadline to register, so check the current rules on GOV.UK.
The first £100k is also where the money stories change
At £60k you can run on feel. At £100k you can’t. The numbers start to move faster than your memory of them, and the guesses you could get away with before become expensive. This is the stage where an owner can feel least in control of the business, even as it looks most successful from the outside.
What does VAT really do at £100k?
Let’s look at a residential cleaning business, with the figures as an example.
| Before registering | After registering, no price change | |
|---|---|---|
| Sales | £88,000 | £110,000 |
| Goes to HMRC (1/6 of what customers pay) | £0 | about £18,300 |
| The business keeps | £88,000 | about £91,700 |
So the business has grown its sales by £22,000, and ended up with just £3,700 more to cover its costs.
And since you’ll have taken on more customers, more cleaning hours and more wages to reach £110k, you could easily be worse off than you were at £88k.
That’s why so many residential businesses hover just below the threshold for years, turning down work to avoid crossing it.
Your options
There’s no magic way around VAT, but there are sensible ways to plan for it:
- Raise prices before you cross the threshold. Gradual, well-explained price rises over a year or two are much easier for customers to accept than a sudden 20% increase. Two rises of 10% a year apart add up to 21%.
- Increase your average price by offering higher-value services, like deep cleans or premium packages.
- Grow your commercial work. Most business clients are VAT registered and can reclaim VAT, so they’re far less affected.
- Ask your accountant about VAT schemes, such as the Flat Rate Scheme, and whether any would help your business.
- Make sure you reclaim the VAT you can on eligible business costs, like equipment, products, vans and software.
The one thing not to do
Don’t try to dodge the threshold by artificially splitting your business into separate businesses. HMRC can treat them as one, and the consequences can be serious. Always get proper advice.
The owners who get through VAT successfully aren’t the ones who avoid the threshold. They’re the ones who plan for it early.
What’s the plan for getting past £100k?
Getting past £100k isn’t about working harder. It’s about building the business that can carry £100k, and more, before you get there.
1. Price for the business you’re becoming
Your prices need to cover not just today’s costs, but the costs of the business you’ll be at £150k. That means a team leader, admin support, VAT and a proper wage for you.
Work out what an hour of cleaning really costs you, including wages, holiday pay, travel time, products, fuel and overheads, then add the profit you need. The full method is in Stop using industry standards if you want to win.
Then review prices every single year, at the same time. Even a modest rise matters. Look at what 10% does to a business turning over £60,000: if it didn’t lose a single customer, turnover goes to £66,000, and because none of its costs change, the extra £6,000 goes straight to the owner. That can turn a £16,000 income into £22,000.
2. Decide what you want to pay yourself
Owners often pay themselves whatever’s left over. At £100k, that’s usually not very much.
Decide on a fair wage for your role in the business, and build it into your pricing and your plans as a cost, not an afterthought. If the business can’t afford to pay you properly, that’s a pricing and margin problem you need to solve, not a sacrifice you should keep making.
3. Hire your first manager earlier than feels comfortable
The hire that gets most owners past £100k isn’t another cleaner. It’s someone who takes part of the running of the business off you. That might be a team leader who covers sickness and checks quality, or part-time admin support that handles scheduling, enquiries and invoicing.
It will feel expensive. But it’s what frees you up to do the pricing, selling and planning that actually grows the business. See Who to hire first as you grow your cleaning business for how to decide, and Can you afford your first hire? for the sums.
4. Build a cash buffer before you grow
Growing takes cash. You pay new cleaners before new customers pay you. You need equipment before you do the work. VAT is usually paid quarterly.
Before you push for £100k, build a buffer of at least one month of wages and fixed costs. Keep your VAT money in a separate account, so you’re never tempted to spend it.
5. Choose your path
Trying to grow in every direction at once is one of the fastest ways to get stuck. Decide whether your main growth will come from lots of regular customers or fewer, larger contracts, and build your systems and marketing around it.
6. Get your systems in place
At £100k, the business can’t run on your memory anymore. You need written processes for your rota, sickness cover, new customer set-up, invoicing, complaints and training. Start with the jobs that interrupt you most often. Build the boring business shows you how.
What does a realistic timeline look like?
Every business is different, but a realistic plan for getting from around £60k to comfortably past £100k might look like this:
| Stage | Focus |
|---|---|
| First 3 months | Reprice customers, especially your least profitable ones. Build your cash buffer. |
| Months 4–6 | Write your core processes. Promote or hire a team leader. |
| Months 7–9 | Grow your customer base in your core area. Plan for VAT with your accountant. |
| Months 10–12 | Add admin support. Review pricing again before crossing the VAT threshold. |
| Year two | Grow past the threshold with pricing, systems and a team that can carry it. |
It’s not instant. But it’s far faster than spending five years stuck at £85k.
What’s on the other side of £100k?
Once you’re through, things get easier. Your pricing covers your costs. Your team handles the day-to-day. You’re paying yourself properly. VAT is built into how you run. And growth starts to come from the business, not from you pushing harder.
£100k is hard because it’s where your business has to grow up. Get through it properly, and everything after gets easier.
That’s exactly the stage Cadi is being built for: your money, your customers and your team in one place, so you can see where the business really stands before the next ceiling arrives.
Common questions about VAT and growing past £100k
When do I have to register for VAT as a cleaning business?
You have to register for VAT if your taxable turnover goes over £90,000 in any rolling 12 months, or if you expect it to go over £90,000 in the next 30 days alone. It’s a rolling test, not a tax-year one, so there’s no single date in the diary. Check the current threshold and the registration deadline on GOV.UK.
What counts as taxable turnover?
Taxable turnover is the total value of everything your business sells that isn’t exempt from VAT, including standard-rated, reduced-rated and zero-rated sales. It’s sales, not profit.
Why is VAT harder on a domestic cleaning round?
Business customers can usually claim VAT back, so for them it costs nothing. Householders can’t, so for them adding VAT is a 20% price rise. You either raise prices or take the VAT out of your own margin.
What does VAT cost a residential cleaning business near the threshold?
As an illustration, a business with £88,000 of sales that grows to £110,000 of customer payments and registers for VAT passes about £18,300 to HMRC and keeps about £91,700. That’s £22,000 more in sales and only about £3,700 more to cover the extra cleaners, hours and costs.
Can I split my business in two to stay under the VAT threshold?
Not artificially. HMRC can treat separate businesses as one, and the consequences can be serious. Get proper advice before changing how your business is set up.
How do I plan for VAT before I reach the threshold?
Raise prices gradually and early, know which customers can reclaim VAT, grow commercial work on purpose, reclaim the VAT you can on business costs, and ask your accountant about schemes such as the Flat Rate Scheme. Start a year or two before you expect to cross.
Why do many owners take home less at £100k than at £60k?
Costs grow with the business: wages, insurance, fuel, software and, eventually, someone to help manage. Unless prices and margins keep up, turnover rises while the owner’s income stays flat or falls.
Sources, as at 4 November 2026
The figures are an illustration, not a quote. VAT thresholds and rules can change, so check GOV.UK and talk to an accountant before you decide anything. Not tax advice.
Cadi opens on 1 January for UK cleaning businesses, with a free Lite plan. Join the waitlist and you’ll hear from us before anyone else.
Rhianna
