VAT registration threshold discussion arises again – small business consultation

Introduction

The Office of Tax Simplification (OTS) report in November 2017 recommended the government should review the VAT registration threshold and 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 whilst the government consult on the issue. This 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 be better used to incentivise growth. The consultation is designed to explore the effects of the current system on small businesses and discuss other policy options. There is a range of questions that not only delve into the OTS issues, but also what effect the threshold has on small business decisions.

There is a traditional document which can be responded to in the usual way, but there is also a short 7 minute survey which 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 the digital record keeping, the VAT administration linked with the threshold is likely to become much more of an issue for smaller businesses.

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

Contact us

If you have any more queries please contact Nigel Smith or Lauren Graham.

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