Vat threshold being lowered?

[elise2000]

Article in the dailymail today saying they are considering lowering the threshold to 30k in the autumn budget.

As not the most reliable source, has anyone read anything else regarding this?

Thanks in advance

[Deep Thought]

elise2000 said:

Article in the dailymail today saying they are considering lowering the threshold to 30k in the autumn budget.

As not the most reliable source, has anyone read anything else regarding this?

Thanks in advance

There seems to be no basis for the story, other than someone who once suggested the idea is now going to be working at No 10.

The Telegraph - and other reputable sources - are saying the threshold is likely to be RAISED...

https://www.ajbell.co.uk/news/articles/press-uks-r...

[elise2000]

Deep Thought said:

elise2000 said:

Article in the dailymail today saying they are considering lowering the threshold to 30k in the autumn budget.

As not the most reliable source, has anyone read anything else regarding this?

Thanks in advance

There seems to be no basis for the story, other than someone who once suggested the idea is now going to be working at No 10.

The Telegraph - and other reputable sources - are saying the threshold is likely to be RAISED...

https://www.ajbell.co.uk/news/articles/press-uks-r...

Ha, typical telegraph and mail saying the opposite then!

Thanks

[Hill92]

Deep Thought said:

There seems to be no basis for the story, other than someone who once suggested the idea is now going to be working at No 10.

The Telegraph - and other reputable sources - are saying the threshold is likely to be RAISED...

https://www.ajbell.co.uk/news/articles/press-uks-r...

AJ Bell are just quoting the Telegraph and I wouldn't call the Telegraph reputable.

Under the Windsor Framework, Northern Ireland and thus the UK cannot set the VAT registration threshold higher than the maximum allowed EU threshold plus a 15% allowance for movements in exchange rate. The current EU threshold is €100,000, which translates to £86,000 today. The current UK threshold of £90,000 is 4% over that. The maximum threshold that could be applied within the 15% allowance is £99,000. But any adverse movement in exchange rates would then require an immediate reduction in the VAT threshold so the threshold will always be set closer to the €100,000 equivalent.

So it is extremely unlikely that officials have been suggesting this as The Telegraph claim, let alone that the VAT thresholds will be increased.

Meanwhile HMRC research suggests that reducing the threshold to a level where effectively all businesses will have to register (typically suggested as £30,000) would remove a cliff edge that discourages small businesses expanding beyond the VAT threshold and constrains economic growth.

https://www.icaew.com/insights/tax-news/2024/sep-2...

This position was backed by the Resolution Foundation. Their former CEO until last year, Torsten Bell, is now a Labour MP and minister in the Treasury and DWP. He is reported to be playing a key role in the preparation of the Autumn Budget. This is the basis of the Daily Mail reporting.

[Deep Thought]

Hill92 said:

AJ Bell are just quoting the Telegraph and I wouldn't call the Telegraph reputable.

Under the Windsor Framework, Northern Ireland and thus the UK cannot set the VAT registration threshold higher than the maximum allowed EU threshold plus a 15% allowance for movements in exchange rate. The current EU threshold is €100,000, which translates to £86,000 today. The current UK threshold of £90,000 is 4% over that. The maximum threshold that could be applied within the 15% allowance is £99,000. But any adverse movement in exchange rates would then require an immediate reduction in the VAT threshold so the threshold will always be set closer to the €100,000 equivalent.

So it is extremely unlikely that officials have been suggesting this as The Telegraph claim, let alone that the VAT thresholds will be increased.

Meanwhile HMRC research suggests that reducing the threshold to a level where effectively all businesses will have to register (typically suggested as £30,000) would remove a cliff edge that discourages small businesses expanding beyond the VAT threshold and constrains economic growth.

https://www.icaew.com/insights/tax-news/2024/sep-2...

This position was backed by the Resolution Foundation. Their former CEO until last year, Torsten Bell, is now a Labour MP and minister in the Treasury and DWP. He is reported to be playing a key role in the preparation of the Autumn Budget. This is the basis of the Daily Mail reporting.

I wasnt necessarily including the Telegraph as a "reputable" source but in the cursory look around, it did seem that there was a lot of noise about it potentially going up, not going down.

And i wouldnt be relying on HMRC to have an unbiased opinion on the subject.

Yes, as i said, the Daily Mail view is based on that one individual - Torsten Bell - moving to a key role and him having expressed that view previously.

I think bringing it down would be a fairly disastrous move politically - i cant imagine small business owners would thank HMRC for giving them the opportunity to pay even more tax even if it was suggested that its for their own good and it would be seen by the general public as the government further stiffing small businesses and putting an extra tax burden on small businesses rather than helping them to grow.

But, hey ho. We'll see soon enough.