There is no point defending the indefensible

Following the comments made last month (Nunn p19, April 2018) concerning a consultation into the rules for VAT registration, it appears appropriate to make some further comments about the suggested ‘solutions’ on the registration threshold which closes for comment on 5 June 2018. One idea, drawn from EU discussions, is to introduce headroom of 50% above the threshold (which may be the same or different to the current threshold) under which no registration is required, but that a period of 12 months above the basic threshold would require registration (presumably from the date of completing the 12 months).

This does not appear to be a worthwhile approach. It does little more than codify an arrangement that already exists as an option open to HMRC in the current rules. It may save some businesses from having to register, but is more likely to delay the inevitable for a short time, and does nothing to disincentivise remaining below the threshold and thus stunting business growth aspirations. It also makes the registration rules more complicated, rather than less.