The VAT threshold is one of those numbers that cleaning business owners know exists but rarely track with any precision. You're focused on winning jobs, managing rounds, and getting paid. VAT feels like someone else's problem — until suddenly it isn't.
The threshold rose to £90,000 in April 2024, up from £85,000 where it had sat since 2017. That increase gave sole traders a little more headroom, but it didn't change the rule that catches most people out: it's not a tax-year threshold, it's a rolling 12-month one. That single distinction is where the trouble starts.
What is the VAT threshold?
You are required to register for VAT if your taxable turnover — the total value of goods and services you supply that are not exempt from VAT — exceeds £90,000 in any rolling 12-month period. The current threshold has been in place since 1 April 2024.
For cleaning businesses, virtually everything you do is standard-rated for VAT purposes. Domestic cleaning, commercial cleaning, window cleaning, jet washing, gutter clearing — all of it counts toward your taxable turnover. There are no VAT exemptions for cleaning services.
There is also a deregistration threshold of £88,000. If you're already VAT-registered and your taxable turnover falls below £88,000, you can apply to deregister. The gap between registration and deregistration thresholds exists to prevent businesses oscillating in and out of VAT registration as turnover fluctuates near the boundary.
The 12-month rolling rule
This is the part that catches cleaning businesses off guard. The VAT threshold does not reset on 6 April each year. It applies to any rolling 12-month window — meaning you need to look back from the end of each calendar month at the previous 12 months' worth of turnover.
If your total invoiced income in any 12-month period ending on the last day of a given month exceeds £90,000, you have exceeded the threshold. It doesn't matter that your annual tax return shows a lower figure, or that you had a slow April — if the rolling window triggered, the obligation applies.
Consider a straightforward example. A window cleaner has a round covering 80 houses. In January 2024 they took on three new streets — adding 40 houses and lifting their round to 120 properties. Their income grew steadily through the year. By November 2024, when they look back 12 months, the growth in their round has pushed them over £90,000 for the first time. But if they've been tracking by tax year, they might not notice until they sit down to do their January 2026 tax return.
Why exterior cleaning businesses are most at risk
Interior domestic cleaners typically work fixed hours for a fixed set of clients. Growth tends to be gradual. But exterior cleaning — window rounds, gutter clears, jet washing, fascia and soffit cleaning, solar panels — has a scaling dynamic that's fundamentally different.
A window cleaning round is a recurring revenue business. Once you have a customer, they typically stay for years. Adding streets or estates compounds quickly. Here is what the maths looks like at different round sizes:
Now add in the work that sits on top of a window cleaning round. A gutter clear at £80–£120 per job. A driveway jet wash at £120–£180. Fascia and soffit cleans at £200–£350. Solar panel cleans. These are high-value one-off jobs that many window cleaners naturally cross-sell to their existing round customers. Each one pushes the rolling 12-month total higher.
A window cleaner with 300 houses paying an average of £12 per visit on a four-weekly cycle — not fortnightly — is billing roughly £43,200 per year from the round. Add gutter season (two visits a year for a third of the round at £100 each = £20,000), some jet washing and you are at or near £90,000 before you've taken on any staff or made any dramatic changes to how you work.
This is why the VAT threshold catches exterior cleaners: the round model builds silently and consistently. You don't get a dramatic turnover event — you just keep doing what you've always done, adding a few customers at a time, and one month the rolling window flips.
When and how to notify HMRC
Once your taxable turnover in any rolling 12-month period exceeds £90,000, the obligation clock starts. You must notify HMRC within 30 days of the end of the month in which you exceeded the threshold. Registration takes effect from the first day of the month following the end of that 30-day notification window.
Example: your rolling 12 months ending 31 October 2025 total £92,000. You exceeded the threshold during October. The 30-day notification window runs to 30 November. You must notify by 30 November. Your VAT registration date becomes 1 December 2025. From that date, you must charge VAT on your invoices.
Notification is done through your HMRC online account or VAT1 form. Once registered, HMRC issues you a VAT registration number and your first VAT return period.
Late registration penalties are calculated as a percentage of the net VAT that was due from the date you should have registered to the date HMRC discovered or you corrected the error:
| How late | Penalty rate |
|---|---|
| Up to 9 months late | 5% of net VAT due |
| 9 to 18 months late | 10% of net VAT due |
| More than 18 months late | 15% of net VAT due |
The minimum penalty is £50. On a business that should have registered for a year at £95,000 turnover — VAT liability of roughly £15,833 — a late registration penalty could be £2,375 or more, before any interest on the unpaid VAT.
Voluntary registration: is it worth it?
You can register for VAT voluntarily at any time, even if your turnover is well below £90,000. This is sometimes worth considering, particularly if you work with commercial clients or have significant business purchases.
Arguments for voluntary registration:
- You can reclaim VAT on business purchases — your van, equipment, chemicals, pressure washer, ladders, workwear. At 20% VAT on these costs, the reclaim can be substantial, particularly if you've recently invested in new equipment.
- Commercial clients who are themselves VAT-registered don't mind — they reclaim the VAT you charge them. Being VAT-registered can signal that you're a serious operator to commercial customers.
- If you're close to the threshold, voluntary registration now removes the risk of late registration later.
Arguments against:
- Residential customers cannot reclaim VAT. Adding 20% to your prices makes you more expensive than unregistered competitors. A £150 driveway jet wash becomes £180 with VAT — a significant difference for a price-sensitive domestic client.
- VAT returns require quarterly filing and reconciliation — additional admin overhead.
- Cash accounting becomes more complex. You need to track when VAT is due on each invoice rather than when you get paid (unless you use the cash accounting scheme).
For exterior cleaners primarily serving residential customers, the pricing impact is the dominant concern. If your round is 90% domestic, voluntary registration before you need to is rarely advantageous. Once you're past the threshold, however, the Flat Rate Scheme changes the calculation considerably.
The Flat Rate Scheme for cleaning businesses
The VAT Flat Rate Scheme (FRS) is designed to simplify VAT accounting for small businesses. Instead of calculating the exact VAT on every purchase and sale, you pay HMRC a fixed percentage of your VAT-inclusive turnover. HMRC sets the rate for each trade category.
For cleaning services, the Flat Rate is 12%.
Here is how it works in practice: you charge your customers the standard 20% VAT on top of your prices. But instead of paying HMRC the difference between the VAT you collected and the VAT you paid on purchases, you pay 12% of your gross (VAT-inclusive) turnover. The difference between what you collected and what you pay is yours to keep.
| Annual (ex-VAT) turnover | VAT collected at 20% | FRS payment (12% of gross) | FRS saving vs standard VAT |
|---|---|---|---|
| £90,000 | £18,000 | £12,960 | £5,040 |
| £100,000 | £20,000 | £14,400 | £5,600 |
| £120,000 | £24,000 | £17,280 | £6,720 |
| £150,000 | £30,000 | £21,600 | £8,400 |
The FRS saving is effectively a cash benefit — but it comes with a trade-off. Under the Flat Rate Scheme, you cannot reclaim input VAT on your purchases, except on capital items costing more than £2,000 including VAT (a new van, for example). If you have significant ongoing purchases that carry VAT — large quantities of chemicals bought through a trade supplier, for instance — the inability to reclaim input VAT may outweigh the FRS benefit. Do the sums for your specific cost structure.
Practical steps if you're approaching the threshold
If your turnover is anywhere near £70,000 to £90,000, you should be tracking your rolling 12-month figure monthly. Here is what to do:
- Calculate your rolling 12-month turnover right now. Add up every invoice from the past 12 calendar months. If it's above £90,000, you may already be in a late registration situation — speak to your accountant immediately.
- Set a monitoring cadence. At the end of every month, add that month's income and subtract income from 13 months ago. This gives you your current rolling 12-month figure. It takes five minutes if your records are in order.
- Prepare for registration in advance. If you're at £75,000 and growing, start understanding the administrative requirements, your VAT position and whether the Flat Rate Scheme suits you. Being prepared means registration is a planned event, not a crisis.
- Talk to a VAT-aware accountant. The decision between standard VAT, Flat Rate, and cash accounting is not trivial. A one-hour conversation with an accountant before you register will save time and money later.
- Consider your pricing. If registration is coming, you need a plan for how you'll handle it with existing clients. For commercial clients, it's usually straightforward. For residential, you may need to absorb some of the cost or have honest conversations about price increases.