- The VAT threshold has stayed at £90,000 since April 2024, unchanged through both the Autumn 2024 and Autumn 2025 Budgets, but the calculation resets every month rather than once a year.
- For high-growth business, one particularly strong month can push turnover over that line long before annual accounts would flag it, and the registration clock starts the moment it happens whether the founder notices or not.
- Run more than one company and the profit thresholds get split between them, which can pull a business into a higher effective rate sooner than a standalone forecast would suggest.
- Check your tax planning quarterly to avoid this.
Fast growth brings its own headaches, and one of the least talked about is tax. Revenue climbing month over month is what every founder wants, but it also means that tax thresholds, filing obligations and relief eligibility can move faster than the business is tracking them. By the time an accountant catches the issue, it has usually already cost money, a missed VAT registration deadline, a wrongly claimed relief, or entering a new corporation tax band unawares.
Here’s where high-growth founders tend to get caught out, and what usually stops it happening.
The VAT threshold catches more founders out than expected
VAT registration sounds simple enough: cross £90,000 of taxable turnover in a rolling 12-month period and you have 30 days to register. The rolling part is the kicker. The House of Commons Library confirms the threshold has stayed at £90,000 since April 2024, unchanged through both the Autumn 2024 and Autumn 2025 Budgets, but the calculation resets every month rather than once a year.
For a fast-growing business, one particularly strong month can push turnover over that line long before annual accounts would flag it, and the registration clock starts the moment it happens whether the founder notices or not.
Corporation tax bands shift faster than founders expect
There are three effective corporation tax tiers at the moment: 19 per cent for profits at or below £50,000; 25 per cent above £250,000; and marginal relief tapering the rate in between. Founders who built their model around the 19 per cent rate often don’t clock it when growth pushes them into marginal relief territory, or the full 25 per cent band, until a year-end filing turns up with a much bigger bill attached.
Associated companies make this messier still. Run more than one company and the profit thresholds get split between them, which can pull a business into a higher effective rate sooner than a standalone forecast would suggest. Short accounting periods lower those thresholds further too, and that detail often doesn’t make it into early-stage planning.
R&D tax relief claims are under more scrutiny than ever
R&D tax relief is still one of the better reliefs available to scaling companies, but HMRC has cracked down hard on enforcement in recent years. Claims that would have sailed through a few years ago now get challenged far more often, and an incorrect claim doesn’t just cost the company that filed it. We covered this in R&D misclaims as a hidden risk for investors, which found that liability from a bad claim can follow a company well after the original filing, especially once investors show up and due diligence starts digging through old paperwork.
Where specialist support actually pays off
Founders juggling product, hiring and fundraising scarcely have time to watch every tax threshold as it moves, and that’s where a good tax adviser earns their fee rather than just their invoice. Firms like Accounts and Legal work with growing companies specifically on this kind of forward planning, flagging threshold risk before it turns into a compliance problem rather than after HMRC has already written a letter about it.
Of course, you want to avoid penalties. Getting VAT timing, corporation tax bands and R&D eligibility right can meaningfully change how much cash is sitting in the business at any given point, and that means a lot when the same cash is also paying for hiring and growth.
The cost of treating tax as an afterthought
Tax obligations become urgent almost overnight once growth kicks in. So, founders who check in on tax planning quarterly, rather than leaving it until year-end, tend to sidestep the scramble that catches so many fast-growing companies off guard.
Jack Dawber-Axon ACCA is head of accounting at Accounts and Legal.
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