This week the “Office of Tax Simplification” issued a report suggesting that the VAT registration threshold – currently £85,000 – be LOWERED perhaps down to £26,000, the so-called “official” national average wage.
That would mean any self employed person or buiness at that level of sales – BEFORE deducting expenses – would be required to register for VAT, charging their customers and submitting quarterly VAT Returns.
Official estimates say that would cause another MILLION businesses to register.
Would you, or anyone you know, be amongst them?
Then there is the prospect of “Making Tax Digital” (MTD).
At the moment only VAT registered taxpayers are required to join MTD from April 2019 and start making quaterly Returns. If you are not VAT registered then you won’t be required to make quaterly Returns until at least 2020.
So what happens if the VAT registration threshold is lowered to the point where you have to register? Looks like you will also have to join MTD in April 2019.
Make no mistake. Both will be huge burdens on the small buisness.
Maybe lobbying your MP may be the way to go.
I’ll leave you to draw your own conclusions and ponder what action you would need to take if all this goes ahead as suggested.