V16.404 VAT—maintain thresholds for two years from 1 April 2020
Who is likely to be affected?
Businesses whose turnover, or total EU acquisitions, are close to the existing VAT registration threshold of £85,000.
General description of the measure
The VAT registration and deregistration thresholds will not change for two years from 1 April 2020.
The taxable turnover threshold which determines whether a person must be registered for VAT, will remain at £85,000.
The taxable turnover threshold which determines whether a person may apply for deregistration will remain at £83,000.
The Office of Tax Simplification (OTS) report published on 7 November 2017 recognised the distortions the threshold causes and recommended the government should review this.
A lead option to address the distortionary effect is to lower the threshold, however the government is resisting such a