VAT Updates
April 21, 2021
As part of the Budget announcements, it was confirmed the threshold for determining when a business needs to be registered for VAT will remain at £85,000 and will be frozen until 31 March 2024. The taxable turnover threshold to determine if a business is able to apply for to deregister for VAT will also remain frozen at its current rate of £83,000 for the same time period.
Businesses need to register for VAT when they meet EITHER of the following two conditions:
1. At the end of any month, the amount of the business taxable supplies made in the previous 12 months or less exceeds £85,000; or
2. At any time, there are reasonable grounds for believing the value of taxable supplies that will be made in the next 30 days alone will exceed £85,000.
It was also confirmed in the budget that the temporary reduced rate of VAT of 5% for businesses in the tourism and hospitality sector will be extended for a further 6 months until 30 September 2021. At that point a new reduced rate of 12.5% will be introduced until 31 March 2022 with the hope this continued VAT cut will aid in the rehabilitation of the tourism and hospitality sector which has been severely impacted by the coronavirus pandemic.
If you would like any further information or help with VAT registration, de-registration or administration please get in touch.
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