Small Businesses: VAT
The question
To ask the Chancellor of the Exchequer, what assessment she has made of the potential merits of raising the VAT registration threshold from £90,000; and whether she plans to conduct a review of the impact of current thresholds on SMEs.
Answered by Dan Tomlinson
With a VAT registration threshold of £90,000, the UK’s threshold is higher than any EU country and the joint highest in the OECD. This means the majority of UK businesses are kept out of the VAT system.
The Government’s approach to the VAT threshold aims to balance potential impacts on small businesses, including their growth and financial sustainability, the economy as a whole, and tax revenues. Tax breaks reduce the revenue available for public services and must represent value for money for the taxpayer.
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