In a bid to support small business and sole traders, the Chancellor has increased the current £85,000 VAT threshold to £90,000
The £90,000 threshold will come in from 1 April, the first increase since 2017, although at £5,000 it is not likely to shift the dial.
The move is designed to support businesses and sole traders which often put off growth due to the VAT compliance costs.
Chancellor Jeremy Hunt said: ‘We should reward smaller businesses who make a big impact on our society and employ millions of people.
‘That’s why from April 1, we’re increasing the VAT registration threshold from £85,000 to £90,000 – cutting taxes for small businesses across the UK.’
The level at which a business can apply for de-registration will increase from £83,000 up to £88,000.
Over 28,000 businesses will benefit in 2024-25 from no longer being VAT registered, the Treasury said.
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