Commentary

V16.404 VAT—maintain thresholds for two years from 1 April 2020

Part V16 Forms and other HMRC material

V16.404 VAT—maintain thresholds for two years from 1 April 2020

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.

Policy objective

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

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