Spring Budget 2024 – VAT Registration threshold changes

Budget, VAT,

The thresholds for VAT Registration and Deregistration were both increased in the Spring Budget on the 6th March 2024. They had both previously been unchanged for seven years.

  • The VAT Registration threshold has increased to £90,000, from £85,000. 
  • The VAT Deregistration threshold has increased to £88,000, from £83,000.

VAT Registration is compulsory if by the end of any month your business’s VAT taxable turnover for the previous 12 months goes above the threshold. This should be monitored on a rolling monthly basis, rather than just at year end.

It’s possible to apply for a Registration ‘exception’ if you believe that you are only temporarily going above the threshold, for instance, because of winning a large one-off project. Provided you can show evidence why your turnover will be below the Deregistration threshold in the next 12 months then HMRC are willing to consider an exception.

Given the length of time since the thresholds were last revised, the increase isn’t huge, but it will help businesses to avoid Registration and the extra administrative work that it brings with it.

If you think the turnover in your business is nearing either of the new threshold amounts, please get in touch. We can confirm whether you need to register and help you with the process itself, but also discuss the pros and cons of adjusting your pricing and processes to make the transition as painless as possible.

You can see our Spring Budget Summary here.

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