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Autumn Budget: VAT threshold frozen for two years

Autumn Budget: VAT threshold frozen for two years

Chancellor Philip Hammond has announced there will be no changes to the £85,000 VAT threshold for the next two years.

However, the government will consult on whether the VAT system should be changed in order to encourage companies to grow.

Presently businesses must register with HM Revenue and Customs (HMRC) if their VAT taxable turnover goes over the £85,000 revenue threshold on anything that is not VAT exempt.

Reports before today's Budget suggested the chancellor would cut this limit to bring it in line with other counties. 

Speaking at the Budget today, Hammond said he notes the ‘cliff edge’ of the VAT threshold and how it ‘disincentives business growth’. But said he does not want to change it for the time being.

‘I am not minded to reduce the threshold but I will consult on it to see if it could be designed for better incentives,’ he said.


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