VAT calculations need to be performed at the end of each month, and when the end of the financial year comes we look back across the previous 12 months. We include any sales which would be subject to VAT if you were VAT registered. We exclude sales which are exempt and outside of the scope of VAT, and include sales which would be at 20%, 5% or 0%. If the total calculation exceeds £85,000 then you are required to register for VAT.