Autumn Budget 2018 – VAT registration and deregistration thresholds

Accountants in Crelly Accountants in Chingford | registered for VAT \ Accountants in Upper Carloway

Autumn Budget 2018 – VAT registration and deregistration thresholds

The Chancellor confirmed in his Budget speech that the taxable turnover threshold that determines whether businesses should be registered for VAT, will be frozen at £85,000 for a further 2 years from 1 April 2020 until 31 March 2022. The taxable turnover threshold that determines whether businesses can apply for deregistration will also be frozen at the current rate of £83,000 for the same time period.

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

  1. 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
  2. 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 Chancellor was clear that the government had explored various options to address the cliff edge effect of VAT registration. This followed the publication of an Office of Tax Simplification report recognising the distortions the threshold causes and recommending the government review this area of tax. The ability to allow small businesses to stay outside the VAT system has many benefits, but there are concerns of the gap between businesses that have to charge VAT against those that do not. HM Treasury will continue to examine this issue, but the Chancellor has provided certainty for the time being on the VAT thresholds for the next number of years.

For more information, Book a Free Consultation

Need Accountancy Support?

For information on bespoke training, or if you have any other questions for Makesworth Accountant, please fill in your details below



    By submitting the form, you agree with the storage and handling of your data to contact you to arrange a free consultation with us and to receive latest updates by Makesworth Accountants in accordance with our Privacy Policy

    Proud to be featured in

    Happy with our services? Please leave us a Google Review. Click here