Spring Budget 2017: VAT registration threshold rises to £85k

From 1 April 2017 the VAT registration threshold will increase to £85,000 from £83,000 and the deregistration threshold will rise from £81,000 to £83,000, announced by Chancellor Philip Hammond as part of the spring Budget

The measure will increase the registration and deregistration thresholds for VAT in line with inflation and for EU acquisition in line with the VAT registration threshold.

By increasing the threshold it will prevent 4,000 small businesses from having to register for VAT by the end of 2017-18, with the deregistration threshold set lower to avoid businesses closes to the threshold level having to constantly register and deregister.

This measure is not expected to have any impact on the Exchequer, costing nothing until 2022.

Normally, the VAT registration and deregistration thresholds are revalorised annually in line with inflation through the use of the Retail Price Index (RPI).

HMRC’s policy paper on VAT registration threshold is available here. https://www.gov.uk/government/publications/vat-registration-threshold/va...

Amy Austin |Reporter, Accountancy Daily [2016-2019]

Amy Austin was reporter, Accountancy Daily and Accountancy magazine, published by ...

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