The Budget and VAT

From 1 April 2024, the VAT registration threshold and deregistration thresholds each increased by £5,000 to £90,000 and £88,000 respectively.

The thresholds had previously been frozen at £85,000 and £83,000 since 1 April 2017. According to the government, this will mean 28,000 businesses will no longer be VAT registered in 2024/25.

In some circumstances, it is possible not to have to register despite turnover exceeding these limits, and in other circumstances it may be better to remain registered.

It is essential that you monitor your turnover on a 12 month “rolling basis” e.g. January to December, then February to January, March to February etc.

There are some real horror stories of people failing to register in time. Also be aware that this can apply to turnover from all businesses aggregated, not each one separately. So, a sole trader working as a self-employed delivery driver during the day with £50,000 turnover and running a pizza business in the evening with £50,000 turnover should be registered.

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