VAT threshold review would hit all sizes of business

In a Spring Statement focused on financials not tax measures, the Chancellor Philip Hammond announced a series of consultations. The most eye-catching was a Treasury consultation to assess how the VAT registration threshold can incentivise small businesses to grow after it was reported that many opt to stay below the £85,000 turnover entry point to avoid paying VAT.

Although small businesses incur extra administrative costs when they register for VAT, many voluntarily do so to reclaim VAT on purchases.