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How’s about VAT?

POSTED BY: Karen Robertson

16 April 18

HMRC’s VAT Notice 700/1: should I be registered for VAT? has recently been updated. The taxable turnover threshold, that determines whether businesses should be registered for VAT has been frozen at £85,000 for 2 years from 1 April 2018. In addition, the taxable turnover threshold that determines whether businesses can apply for deregistration has also been frozen at £83,000 for the same time period.

Businesses are required to register for VAT if they meet either of the following two conditions:

At the end of any month, the value of the taxable supplies made in the past 12 months or less has exceeded £85,000; or

At any time there are reasonable grounds for believing that the value of taxable supplies to be made in the next 30 days alone will exceed £85,000.

The registration and deregistration threshold for relevant acquisitions from other EU Member States is also £85,000.

The Office of Tax Simplification (OTS) recently published a report and made a number of recommendations regarding the current level of the VAT threshold, which the government is concerned is too high. The government will consult further during the 2-year period that the VAT registration limit is frozen.

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