VAT registration threshold discussion arises again – small business consultation

Introduction

The Office of Tax Simplification (OTS) report in November 2017 recommended that the government review the VAT registration threshold. It also recommended they set out the future direction in order to address the distortions they found.

In the 2017 Autumn Budget, the Chancellor said the VAT threshold will remain at £85,000 for the next two years. This is whilst the government consult on the issue. The consultation begins now…

Call for evidence

On 13th March 2018, the treasury launched an open consultation on whether the design of the VAT threshold could incentivise growth. The consultation explores the effects of the current system on small businesses and discusses other policy options. There is a range of questions delving into OTS issues and the effect of the threshold on small business decisions.

There is a traditional document that you can respond to in the usual way, but here is also a short 7 minute survey that can be found and completed here:  https://www.gov.uk/government/consultations/vat-registration-threshold-call-for-evidence

With the move to making tax digital and digital record keeping, the VAT administration linked with the threshold is therefore likely to become much more of an issue for smaller businesses.

Furthermore, extra information about making tax digital can be found here: https://www.taitwalker.co.uk/hmrc-mtd-pilot-2018/

Contact us

Finally, if you have any questions, please contact Nigel Smith or Lauren Graham.