Impact of Increasing VAT Registration Threshold to £90,000 on Small Businesses

• Chancellor has increased VAT threshold from £85,000 to £90,000
• Aim is to support small businesses and sole traders
• Increasing turnover to reach VAT threshold comes at a cost
• Many businesses operate on the edges of the black economy to avoid VAT
• Example of hairdressing industry shows impact of VAT threshold
• Proposal to reduce VAT threshold to nil to avoid disincentive to growth

Source: claritastax.co.uk

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.