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Last updated: 3 Mar 2021
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Spring Budget 2021: VAT registration threshold frozen for another two years

The VAT registration threshold has been frozen since 2018 following a review by the Office of Tax Simplification, and the Chancellor has confirmed today that it will remain so for another two years from 1 April 2022. 

The taxable turnover threshold, which determines whether a person (e.g. an individual, company, partnership or charity) must be registered for VAT, will remain at £85,000 until 31 March 2024. The de-registration turnover threshold, which determines whether a person may apply to deregister for VAT will remain at £83,000 until 31 March 2024. Due to the effect of inflation, the freezing of the threshold gradually brings more small entities into the VAT net, and makes it more difficult for small businesses to avoid registration by say taking a month off or closing for short periods.  

What should you do? 

Businesses operating near the threshold level should monitor their taxable turnover on a monthly basis to ensure they do not miss an obligation to register, as there are penalties for late registration. For more information on the above, or for advice tailored to you, fill out the form below and one of our VAT experts will be in touch to discuss your requirements.  

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Linda Skilbeck

+44 (0)20 8037 3114
skilbeckl@buzzacott.co.uk
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The taxable turnover threshold, which determines whether a person (e.g. an individual, company, partnership or charity) must be registered for VAT, will remain at £85,000 until 31 March 2024. The de-registration turnover threshold, which determines whether a person may apply to deregister for VAT will remain at £83,000 until 31 March 2024. Due to the effect of inflation, the freezing of the threshold gradually brings more small entities into the VAT net, and makes it more difficult for small businesses to avoid registration by say taking a month off or closing for short periods.  

What should you do? 

Businesses operating near the threshold level should monitor their taxable turnover on a monthly basis to ensure they do not miss an obligation to register, as there are penalties for late registration. For more information on the above, or for advice tailored to you, fill out the form below and one of our VAT experts will be in touch to discuss your requirements.  

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If you have an enquiry about how the Budget affects you, your business or charity, complete the form below and one of our experts will be in touch with you.

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