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VAT threshold to be lowered ?

I've long believed that the VAT threshold should be lowered or abolished to provide every business a level playing field, to reduce cash-no-vat transactions, encourage growth and generate additional tax revenue. It's a subject much discussed on LJN in the past.

The Government's OTS has just published its first review of VAT thresholds, hence are actively considering options to simplify the already complex VAT area.

Various financial pundits are suggesting a reduction to £26K or even £20K could be on the cards, with some even hoping for a £0 threshold (unlikely, I'd suggest).

The FSB produced a White Paper some time ago and are expected to review its recommendations for the SME sector to the Government.

So, it's a "watch this space" situation for now............

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Replies

                    • PRO
                      I wonder if there are any stats for how much the self employed take from the state (benefits etc)
                      My imagination tells me they take very little in comparison to an employee?
                      I might be miles off with that idea though!
              • PRO
                I agree with this.
                I know loads of micro business owners (myself included) that have no ambition to grow the business.
                A cake maker I know will only do a maximum of 2 per week as she just wants some spending money.
                Another does arty craft stuff again for some spending money.
                Looking at it from a lifestyle choice perspective these businesses will last as long as the owner wants them to. My main aims are to have some spending money, instilling a work ethic into my kids and still being able to have a life.
                I’m taking 8-10 weeks off work soon. Not many employers would allow that!
                • PRO

                  Those type of businesses are what the Report describes as "Hobby Businesses" and HMRC state it is not their intention to have them included in the VAT regime, hence why they talk about (maybe) £20k T/O and not £20k income

                  • PRO
                    :) like I said I couldn’t face reading it!
                    • PRO

                      It has some good observations so I would find time to read it tho, if only the Executive Sumnary as it sets out what the issues are, possible solutions and likely recommedations this helps an informed viewpoint to develop.

                • Not many employers would allow time off like that but they would happily finish you up for the winter!  Besides i bet your still working overhauling kit etc!

                  • PRO
                    True there’s about a week working on kit. Maybe less this year as I don’t think I can be bothered! I’ll take some to the dealers this time.
                    As for the finishing for the winter I’m sure employers would be happy. On the other hand I would not do this job for somebody as a “job” it wouldn’t suit my life.
                    • PRO

                      I agree, I do this because I 'want' to do it at them moment, but working for someone else means you 'have' to do it. A big difference in mentality.

                      I'm already off for the winter now, and happily pottering around my home and garden. This is only because I can earn a good rate working for myself, where as an employer wouldn't pay me enough through the summer to take the winter off. Not in this business anyway.

                    • PRO
                      That’s exactly it.

                      Can we have a like button pleas Phil!
                    • PRO
                      Has the grass stopped up in Sheffield then mate?
                      Wish it had here it’s still growing like the grass thinks it’s May!!
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