Why it matters
It is used in the VAT registration tests and differs from profit, net cash receipts and some turnover figures used for other purposes. Exempt supplies and certain transactions need separate consideration. A regular rolling calculation helps identify a registration trigger before it is missed. Keep an explanation of the sales categories included or excluded.
A practical example
An online seller has £95,000 of relevant taxable sales and pays £15,000 in platform fees. The fees do not simply reduce taxable turnover to £80,000 for the normal registration test. The sales records, rather than net marketplace deposits, are the starting point.
A common misunderstanding
Zero-rated and exempt do not mean the same thing. A business also should not reset the normal rolling 12-month calculation at its financial year end. Check the current threshold and the separate expectation test before deciding whether registration is required.
Sources & further reading
General information for UK readers, updated 3 November 2026. Examples are illustrative. Tax treatment depends on the facts and current rules; seek advice before making a decision.