In March, HM Treasury issued a ‘call for evidence’ for thoughts and opinions about the threshold for registering for VAT being set at £85,000.
The deadline for consultation is midnight 5 June
The Treasury issued a 7 minute SurveyMonkey and also provided an e-mail address for direct correspondence (as well as a postal address!) which are on the link below
https://www.gov.uk/government/consultations/vat-registration-threshold-call-for-evidence
The UK currently has the highest VAT registration threshold in the EU and it is believed that businesses deliberately restrict growth (by fair means and fowl) to remain under the threshold, to the detriment of UK plc as a whole.
Various suggestions have been made for what might happen to the threshold – it is due to remain at £85,000 until 2020, but after that:
- It may remain unchanged for the foreseeable future – putting a squeeze on businesses (as inflationary pressures reduce profit margins) who structure their operations to remain below the threshold
- It may halve – creating a ‘level playing field’ for businesses, for instance, in the tourist sector who have previously been unwilling to pass on the effect of becoming VAT registered to their customers, without making themselves uncompetitive. The alternative for them has been the equally unattractive option of absorbing the VAT impact, which would have an adverse impact on profits.
Share your thoughts with HM Treasury before the consultation window closes.