Following recommendations by the OTS in its report on VAT simplification, HM Treasury is consulting until 5 June 2018 on the effects of the current VAT threshold on business growth, and ways to smooth the cliff-edge effect for businesses of reaching the threshold.
Following recommendations by the OTS in its report on VAT simplification, HM Treasury is consulting until 5 June 2018 on the effects of the current VAT threshold on business growth, and ways to smooth the cliff-edge effect for businesses of reaching the threshold.
The chancellor announced at Autumn Budget 2017 that the government was not considering a reduction in the threshold. Policy options considered in this consultation include:
the EU proposal for SMEs, which would allow businesses to exceed the threshold by 50% for up to a year without registering, and introduce separate thresholds for absolute exemption and simplified administration;
two options for ‘administrative smoothing’, suggested by the OTS:
extending the first period for which a business has to account for and pay VAT to 6 months; and
applying the threshold test over two years rather than over a single year;
financial smoothing, including examination of practices in other countries, the OTS suggestion of early years’ reductions, and a progressive structure along income tax lines.
Following recommendations by the OTS in its report on VAT simplification, HM Treasury is consulting until 5 June 2018 on the effects of the current VAT threshold on business growth, and ways to smooth the cliff-edge effect for businesses of reaching the threshold.
Following recommendations by the OTS in its report on VAT simplification, HM Treasury is consulting until 5 June 2018 on the effects of the current VAT threshold on business growth, and ways to smooth the cliff-edge effect for businesses of reaching the threshold.
The chancellor announced at Autumn Budget 2017 that the government was not considering a reduction in the threshold. Policy options considered in this consultation include:
the EU proposal for SMEs, which would allow businesses to exceed the threshold by 50% for up to a year without registering, and introduce separate thresholds for absolute exemption and simplified administration;
two options for ‘administrative smoothing’, suggested by the OTS:
extending the first period for which a business has to account for and pay VAT to 6 months; and
applying the threshold test over two years rather than over a single year;
financial smoothing, including examination of practices in other countries, the OTS suggestion of early years’ reductions, and a progressive structure along income tax lines.
.jpg?sfvrsn=335a554c_0 "300 x 250 (MPU)")