Revenue vs turnover vs income: Key definitions for UK businesses
Learn what revenue and turnover mean in the UK, and how they differ from income and profit.
Written by Ebony-Storm Halladay — Freelance accounting copywriter, 10 years. Read Ebony's full bio
Published Friday 10 July 2026
Table of contents
Key takeaways
- Revenue and turnover mean the same thing in the UK: the total your business earns from sales before costs are deducted.
- Income and profit are different: income is all the money you earn from sales and other sources, while profit is what's left after all costs are deducted.
- To calculate revenue, multiply the price of each sale by the number of sales made in a given period.
- Businesses must register for VAT once taxable turnover passes £90,000 over a rolling 12-month period.
Revenue vs turnover: What's the difference?
If you run a small business, you'll have heard the terms 'revenue' and 'turnover' before. Perhaps you've seen them on your financial statements and reports, or filled in a Self Assessment tax return where HMRC asks you to input your business turnover figure.
The terms are used interchangeably in the UK, where the turnover and revenue definition are the same. Both refer to the total amount your business earns from selling products or services in a given period, before costs are deducted. Deduct costs from your revenue or turnover figure, and you get your profit amount.
You might also see turnover used in other business contexts. For example, employee turnover describes how frequently your staff change, and inventory turnover is how often you buy and sell stock in a given period. In the US, it's more likely you'll see revenue used to describe total sales than turnover.
What is income in UK accounting?
Income is the money a business or person earns from all sources. That includes sales, but also other income such as interest, grants, or dividends. Revenue is more specific: it's the money from your core sales, before any costs are taken off. So revenue is one type of income, and that difference in scope is the main thing that sets the two terms apart.
You'll also come across the terms gross income, net income, and taxable income. Each one measures your income at a different stage, and the definitions below explain what sets them apart:
- Gross income: Your total income before any tax, National Insurance, or other deductions are taken off. Deducting the cost of goods sold (COGS) from revenue gives you gross profit, which is a separate measure.
- Net income: The amount left after you deduct all expenses, Income Tax, and National Insurance. It's also known as net profit.
- Taxable income: The portion of your business income that's subject to tax, after you deduct allowable expenses and capital allowances.
Revenue vs turnover vs income vs profit
In the UK, revenue and turnover mean the same thing: the total money your business brings in from sales. Income is broader still, covering the money you earn from all sources, while profit is what's left once costs are deducted. Getting these four terms straight helps you read your accounts with confidence.
The table below sets out what each term means so you can tell them apart at a glance.
Term
What it means (UK)
Revenue
The total money from sales before any costs are deducted.
Turnover
The total money from sales before any costs are deducted, the same as revenue in the UK.
Income
All the money a business earns, including sales and other sources such as interest or grants.
Profit
What's left once all costs are deducted from revenue.
How to calculate revenue and turnover
To calculate your revenue, you need to work out how much your business has sold in a given period, and the price of each sale. To work it out, you multiply the price of each sale by the number of sales you've made. For example:
A plant shop sells houseplants at £5 per plant. In a month, the business sells 400 plants. The revenue calculation is:
- £5 x 400 = £2,000
So, the plant shop earns £2,000 in revenue that month. Keep in mind that a turnover or revenue figure can be gross, meaning before returns and discounts, or net, meaning after they've been taken off.
Calculating turnover for VAT
Businesses in the UK must register for VAT when their company reaches a certain level of turnover. Currently, businesses must register once their taxable turnover passes the £90,000 VAT registration threshold over a rolling 12-month period. In this context, HMRC defines qualifying turnover as the amount earned from providing goods or services, minus any trade discounts and VAT. Businesses can also sign up for VAT voluntarily, before meeting the threshold.
Where revenue and turnover show in UK financial statements
You can find turnover on your income statement (or profit and loss sheet), under the 'sales revenue' section. It usually sits at the top as the first line, before costs are taken off. You can also see cash amounts for revenue earned on a cash flow statement.
Make revenue and turnover simple with Xero
Revenue is a critical business metric. Knowing how to track revenue for small business purposes is essential, because it helps you understand whether you can cover costs, afford to invest, or should focus on boosting profits. Your revenue figure changes with every sale, so you must monitor it closely.
With Xero accounting software, financial clarity is only a few clicks away. You can view your revenue, along with other key metrics like profit, expenses, and available cash at any time with beautiful dashboards and reports built on your live accounting data. Create reports and projections to see where your business is headed and unearth risks and opportunities for growth. With Xero, you can also build compliant reports for Companies House submissions, so it's easier to meet your company obligations.
FAQs on revenue vs turnover in the UK
These answers cover common questions about revenue, turnover, and income in UK accounting.
Is turnover the same as revenue in the UK?
Yes, the terms are used interchangeably in the UK to mean the total amount that comes into your business from the sale of goods and services. The revenue definition is the same as turnover in the UK.
Do I include VAT in turnover?
If you're calculating taxable turnover for UK VAT purposes, VAT is excluded.
Is "income" the same as profit?
No. Income is the money your business receives from sales, as well as other forms of income, such as grant money or income from investment dividends. Profit is the chunk of money left, after you've deducted all expenses from your income. It's the bit your business gets to keep after you've made your costs, taxes, and other expenses.
Does subscription revenue count as turnover?
If your business sells subscriptions – for example, software or products delivered monthly – the money you make from this counts towards your business turnover. It's income from something you sell.
How do I track revenue vs other income?
You can create an income statement to see your revenue and other income sources. This is easy with modern accounting software, which uses your accounting records to generate accurate, clear reports you can use to understand your business better.
Get one month free
Purchase any Xero plan, and we will give you the first month free.