The OTS has made 23 separate recommendations (8 core and 15 administrative) in its final report on VAT simplification.
The OTS has made 23 separate recommendations (8 core and 15 administrative) in its final report on VAT simplification. The main theme is around a thorough examination of the registration threshold, including potential smoothing mechanisms to address the distorting effects of the UK’s relatively high threshold. The core recommendations call for:
At £85,000, the UK has one of the highest registration threshold levels in the world. While the OTS sees this as a form of simplification, enabling many small businesses to stay out of the VAT system, it is a relief which comes at a cost of around £2bn per annum and evidence suggests that many growing businesses are discouraged from expanding beyond this point.
Alan McLintock, chair of CIOT’s indirect taxes sub-committee, gave the report a warm welcome, but noted that changes to the VAT threshold will face a trade-off, saying: ‘While the current threshold can act as a barrier to the growth and activity of a business, many small businesses have spent their lifetimes not dealing with VAT and having correspondingly less regular contact with HMRC.’
The OTS has made 23 separate recommendations (8 core and 15 administrative) in its final report on VAT simplification.
The OTS has made 23 separate recommendations (8 core and 15 administrative) in its final report on VAT simplification. The main theme is around a thorough examination of the registration threshold, including potential smoothing mechanisms to address the distorting effects of the UK’s relatively high threshold. The core recommendations call for:
At £85,000, the UK has one of the highest registration threshold levels in the world. While the OTS sees this as a form of simplification, enabling many small businesses to stay out of the VAT system, it is a relief which comes at a cost of around £2bn per annum and evidence suggests that many growing businesses are discouraged from expanding beyond this point.
Alan McLintock, chair of CIOT’s indirect taxes sub-committee, gave the report a warm welcome, but noted that changes to the VAT threshold will face a trade-off, saying: ‘While the current threshold can act as a barrier to the growth and activity of a business, many small businesses have spent their lifetimes not dealing with VAT and having correspondingly less regular contact with HMRC.’