Turnover vs revenue · UK accounting guide
Turnover vs revenue: what's the difference in the UK?
Written by Iftikhar Rashid FCCA — Managing Partner, RR Accountants.
Short answer
In the UK, turnover and revenue usually mean the same thing — total sales income before any deductions. HMRC uses "turnover" in self-assessment and CT600 returns. Revenue can have a broader accounting meaning that includes non-trading income, but for most small businesses the terms are interchangeable. The key distinction is between turnover (total sales) and profit(what remains after costs).
The key distinction
Turnover
Total sales income before any costs. The 'top line'. What you invoiced or received from customers in the period.
Example: A plumber invoices £120,000 in a year. Their turnover is £120,000.
Revenue
Often synonymous with turnover. Can include non-trading income (interest, investments) in broader accounting usage.
Example: A company has £100,000 in sales plus £5,000 interest — total revenue £105,000.
Profit
Turnover minus all costs. Gross profit = turnover minus direct costs. Net profit = after all overheads and tax.
Example: Plumber has £120,000 turnover, £80,000 costs. Net profit = £40,000.
Turnover vs revenue — FAQs
Is turnover the same as revenue?
In the UK, turnover and revenue are usually used interchangeably — they both mean the total income generated from sales of goods or services before any expenses are deducted. The distinction that sometimes matters: revenue can include non-trading income (interest, investment returns), while turnover typically refers to trading income only. For most small businesses, sole traders, and limited companies, the two terms mean the same thing.
What is turnover in the UK?
Turnover is the total value of sales made by a business in an accounting period — before deducting any costs. It is the 'top line' of a profit and loss account. HMRC uses turnover as the primary income measure for tax purposes: self-assessment uses it for sole traders, CT600 uses it for limited companies, and the VAT threshold is based on taxable turnover.
What is revenue?
Revenue is a broader term for income a business earns. In most UK business contexts, it means the same as turnover — total sales receipts. In more technical accounting, revenue can include interest earned, rental income, and other operating income alongside trading sales. For a UK limited company's statutory accounts, all income goes into the profit and loss account under revenue categories.
What is the difference between turnover and profit?
Turnover is total sales before any deductions. Profit is what remains after deducting all costs — including cost of sales, operating expenses, depreciation, and tax. Gross profit = turnover minus direct costs. Net profit = gross profit minus all overheads. A business can have high turnover and low (or negative) profit if costs are high.
Does HMRC use turnover or revenue?
HMRC primarily uses 'turnover' for self-assessment (sole traders, partnerships) and 'turnover' in CT600 corporation tax returns. The VAT registration threshold is based on taxable turnover. MTD Income Tax thresholds (£50,000 from April 2026) are based on gross turnover/income, not profit. [VERIFY current thresholds at gov.uk]
What counts as turnover for the VAT threshold?
The VAT registration threshold is based on taxable turnover — sales of goods and services that are standard-rated, reduced-rated, or zero-rated for VAT. Exempt supplies (such as most residential property rental) do not count towards the threshold. The threshold is assessed on a rolling 12-month basis. [VERIFY current threshold at gov.uk/vat-registration-thresholds]
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