Autumn Budget 2017: No reduction to VAT threshold for small businesses?
The VAT threshold will be maintained at its current level of 85, 000 for the next two years, the chancellor has announced, keeping thousands of small business out of the system until at least 2020.
Following a backlash from the small business community regarding a potential reduction of the VAT threshold, chancellor Philip Hammond eased fears in today’s Autumn Budget with a promise tofreezethe entry rate at the existing level for two years from April 2018.
Read more Autumn Budget coverage, here
The debate regarding a potential reduction of the entry threshold emerged after an independent review proposed significant reforms to the current system. The idea was strongly criticised by the Federation of Small Businesses (FSB) as an unnecessary drain on small firms? time and resources.
Commenting on the two-year pause on the VAT threshold level, Steve Seal, director of sales and distribution at Bluestone Mortgages, said the announcement would bring a ‘sigh of relief? to contractors, freelancers and entrepreneurs who benefit from being outside the VAT system.
The FSB has also acknowledged the move as “good news” for small business owners who won’t face the added administrative burden.
.@PhilipHammondUK notes FSB concerns about VAT threshold and freezes it at 85, 000 for the next two years – good news as VAT is already a big burden, with small firms spending a working week each year dealing with their VAT obligations #Budget2017pic.twitter.com/gvGf44zwuk
Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.
After an independent, government-backed review recently recommended significant changes to Britain's VAT system, Business Advice readers got in touch to offer the perspectives of the UK's small business owners. more»
An independent review has proposed significant changes to the VAT system, promising to simplify the tax burden for small business owners. But, with indications the entry threshold could be reduced, an organisation representing smaller firms has called for reform to instead focus on supporting entrepreneurs. more»