Accounting glossary

Turnover

What turnover is, the UK term-replacement history, and how the 2026 VAT registration threshold (90,000 UK) is calculated against turnover.

By ExpenseFlow team
· 18 May 2026

Definition

Turnover is the total revenue a business generates from its primary trading activities over a defined period. It is presented as the top line of the income statement, before any costs are deducted. The term “turnover” is the legacy UK label that FRS 102 has formally replaced with “revenue” (though everyday UK usage retains both terms interchangeably). In AU, CA, NZ, and SG, “revenue” is the dominant term; “turnover” is uncommon outside business-law and small-business-test contexts.

What turnover means in practice

For a UK bookkeeper, “turnover” and “revenue” are interchangeable in everyday speech. The face of FRS 102 statutory accounts uses “turnover” (a legacy from older UK GAAP); the notes and policies often use “revenue”. HMRC uses both terms across different forms and guidance.

The most consequential operational use of “turnover” in the UK is the VAT registration threshold test. Compulsory registration kicks in when rolling 12-month taxable turnover exceeds 90,000 (the threshold from 1 April 2024). Taxable turnover includes standard-rated and zero-rated sales but excludes exempt sales and outside-the-scope items. Businesses near the threshold need to track rolling turnover monthly to catch the registration trigger; missing the registration deadline produces a late-registration penalty plus an obligation to account for VAT on past sales as if registered from the threshold date.

A practical example: a UK consultancy approaching the threshold. Monthly revenue has been growing from 6,500 in January 2026 to 8,500 in October 2026. Rolling 12-month turnover at end-October: 92,000. The bookkeeper sees the threshold has been crossed and registers for VAT effective 1 December 2026 (the start of the second month after the threshold breach is reached). From 1 December onward, every invoice carries 20% VAT and every quarter triggers a VAT return submission via MTD-compatible software.

How turnover works by country

United Kingdom

FRS 102 Section 5 uses “revenue” as the formal term; older UK GAAP and Companies Act 2006 retain “turnover” as a synonym. Everyday UK usage uses both interchangeably. The face of statutory accounts under FRS 102 typically labels the top line “turnover” (in keeping with companies-act tradition). The 2026 VAT registration threshold (90,000 from 1 April 2024) is measured against rolling 12-month taxable turnover.

Australia

Australia uses “revenue” under AASB. “Turnover” is occasionally used in older Australian usage and in specific business-law contexts. The key statutory usage: the “aggregated turnover” test for small business entities under section 328-115 of the ITAA 1997, applied at AUD 10 million for the GST cash basis option and AUD 50 million for the small company tax rate (25% vs general 30%). The instant asset write-off threshold is also measured against aggregated turnover.

Canada

Canada uses “revenue” under ASPE and IFRS. “Turnover” is rare in Canadian usage. The CRA’s small business deduction operates on active business income up to CAD 500,000 (reducing the federal corporate tax rate from 15% to 9% on that band, with provincial reductions on top).

New Zealand

New Zealand uses “revenue” under NZ IFRS. “Turnover” is uncommon in NZ usage. The GST registration threshold (NZD 60,000) is measured against taxable supplies in any 12-month period (past or future).

Singapore

Singapore uses “revenue” under SFRS(I). “Turnover” is uncommon. The GST registration threshold (SGD 1 million) is measured against taxable turnover in the past 12 months or expected in the next 12 months. The threshold is one of the highest among comparable jurisdictions.

Turnover is the top line of the income statement:

  • Revenue recognition determines when turnover can be recorded.
  • The income statement is the statement turnover appears on.
  • Profit and loss is the everyday synonym for income statement.
  • VAT registration threshold is measured against turnover.
  • GST registration thresholds in AU, NZ, CA, SG are also turnover-based.
  • Net profit is what remains after every cost is deducted from turnover.

See also

For the formal IFRS framework that governs when turnover can be recognised, see the revenue recognition entry.

FAQ

See the answered questions above for the turnover vs revenue terminology, the VAT registration trigger, and turnover vs gross sales.

Questions, answered

Common questions

Why does UK GAAP use both 'turnover' and 'revenue'?

Legacy. The Companies Act 2006 (and predecessor companies legislation back to the 1948 Act) uses 'turnover' as the statutory term for revenue from a company's principal activities. FRS 102 (introduced 2015) modernised the financial-statements vocabulary to align with IFRS, using 'revenue'. Both terms appear in current UK statutory accounts: 'turnover' on the face of the income statement, 'revenue' in some notes and policies. Most UK SMBs use the two interchangeably in everyday speech.

How does turnover affect VAT registration?

VAT registration in the UK is compulsory once rolling 12-month taxable turnover exceeds 90,000 (from 1 April 2024). Taxable turnover is total sales of standard-rated and zero-rated supplies, excluding exempt supplies and outside-the-scope supplies. The rolling 12-month test catches businesses that have grown gradually past the threshold; the future-12-month forecast test catches businesses about to receive a large order that will push them over.

Is turnover the same as gross sales?

Substantively yes. Turnover is gross sales of goods and services from primary trading activities, before deductions for VAT or GST (which are collected on behalf of the tax authority and not the business's own revenue). It is shown gross on the income statement; the matching VAT or GST liability sits separately on the balance sheet as output VAT payable.

Keep exploring

Revenue recognition

The accounting principle and framework that determines when revenue can be recorded on the income statement, codified in IFRS 15 (and the eq

Income statement

A financial statement summarising revenue, costs of sales, gross profit, operating expenses, and net profit (or loss) over a defined account

Profit and loss (P&L)

A financial statement summarising revenue, expenses, and the resulting profit or loss over a defined period, identical in substance to the i

VAT (Value Added Tax)

A consumption tax charged on most goods and services in the United Kingdom and the European Union, collected at every stage of the supply ch

GST (Goods and Services Tax)

A broad-based consumption tax on most goods and services in Australia (10%), New Zealand (15%), Canada (5% federal), and Singapore (9%), rec

Net profit

The bottom line of the income statement: revenue minus cost of sales minus operating expenses minus interest minus tax, representing the res

Track turnover without spreadsheets

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