HM Treasury has published ‘VAT registration threshold: Summary of responses’ and have confirmed that the turnover threshold will remain fixed until April 2022.
The responses to the VAT registration: call for evidence have indicated:
- Some businesses manage their turnover to remain below the VAT Registration threshold and avoid Registering for VAT.
- Being VAT registered is perceived to result in complexities, financial and administrative burden.
Respondents recognised the benefits of proposed smoothing strategies, such as a 2 year VAT threshold test, but questioned the added complexity it would cause.
Many respondents suggested that the threshold should be increased to such a level that, once crossed, the business would be able to afford the professional advice required to cope with the additional admin. The government confirmed that it cannot raise the level under EU law at present but will review this as a proposal in the future.
The government have decided to continue to monitor and evaluate the design of the threshold but will make no changes for the time being.
As part of the Budget 2018 announcements, the chancellor confirmed that the registration threshold will remain fixed until April 2022.