The government announced the VAT registration and deregistration thresholds will be frozen at £85,000 and £83,000, respectively until April 2026.
This gives businesses certainty over when they will need to register for VAT for the next three years but will inevitably mean that more smaller businesses will have to register as inflation pushes up turnover. This is of most concern for small businesses that supply directly to consumers and who can’t add the VAT on top of the prices they charge. Therefore, registering for VAT represents an absolute cost to the business.
If your turnover is nearing the threshold, then please do not hesitate to get in touch to explore your options and remember that for VAT purposes you must look at the past 12 months on a rolling basis, not just at the year end.
Import tariffs reduced
In addition, in his Autumn Statement, the Chancellor announced that import duties for over 100 categories of goods will be removed or reduced. This measure is intended to ease the full burden of Brexit felt by businesses importing goods and will go someway in reducing the gap between supply and demand, but as ever, the devil is in the detail.
Please do get in touch if you or your business have been affected by any of the measures announced in the Autumn Statement.