Autumn Budget 2018 – VAT thresholds remain unchanged

The VAT registration threshold is the amount of UK turnover or EU acquisitions in a rolling 12-month period, above which a UK business is required to register for UK VAT.

Usually this threshold increased by a few percentage points each year, but was frozen in the Autumn Budget 2017 as we reported here: http://www.gabelletax.com/blog/2017/11/22/autumn-budget-2017-vat-registration-threshold-frozen/.

The government has extended the freeze of the VAT registration thresholds which will remain at existing levels for two years from 1 April 2020.

The taxable turnover threshold, which determines whether a person must be registered for VAT, will therefore remain at £85,000.

The taxable turnover threshold which determines whether a person may apply for deregistration will remain at £83,000.

This will affect smaller businesses and also those who will be caught by the new rules for Making Tax Digital for VAT, which is due to be implemented from 1 April 2019.