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Spring Budget 2024 – VAT registration threshold changes

7 March 2024

The taxable turnover threshold that determines whether businesses should be registered for VAT will increase from £85,000 to £90,000 from 1 April 2024.

From 1 April 2024, the government will raise the taxable turnover threshold for VAT registration. It will rise from £85,000 to £90,000. Simultaneously, the threshold for businesses eligible for deregistration will increase. It will increase from £83,000 to £88,000. Although the rates were initially expected to remain frozen until 31 March 2026, the Chancellor’s recent announcement marks the first change in seven years. This reflects a deliberate effort to assist SMEs.

Businesses are required to register for VAT if they meet either of the following two conditions:

  1. At the end of any month, the value of the taxable supplies made in the past 12 months or less has exceeded £90,000 (2023-24: £85,000); or
  2. At any time, there are reasonable grounds for believing that the value of taxable supplies to be made in the next 30 days alone will exceed £90,000 (2023-24: £85,000)

If businesses supply goods or services to the UK, then they may incur a VAT registration obligation in the UK. This applies even if they do not have a physical presence in the UK. It also applies to businesses expecting to do business in the UK within the next 30 days.

For more information regarding the Spring Budget 2024, click here.

Source: HM Treasury Wed, 06 Mar 2024 00:00:00 +0100

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