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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
    A warning for those swanning around in brand new 4x4 double cab pickups and VW vans with all the camping gear on at the weekend.

    Paradise Papers: F1 champion Lewis Hamilton 'dodged' VAT on £16.5m private jet
    http://www.bbc.co.uk/news/uk-41886607
    Lewis Hamilton 'dodged' VAT on private jet
    F1 champion received a £3.3m refund after importing the red Challenger 605 into the Isle of Man.
    • PRO
      What exactly is wrong with “swanning around in a pickup at the weekend?”
      Lewis Hamilton 'dodged' VAT on private jet
      F1 champion received a £3.3m refund after importing the red Challenger 605 into the Isle of Man.
      • PRO

        Is there anything wrong with Lewis swanning around in the jet at the weekend?

        Lewis Hamilton 'dodged' VAT on private jet
        F1 champion received a £3.3m refund after importing the red Challenger 605 into the Isle of Man.
        • PRO

          If it’s found he, or his advisors, broke the law then he deserves all the penalties, jail tc relevant.

          If he, or his advisors, found legal loopholes then good luck and all the whinging should stop. Too much
          green eyed jealousy.

          How the government can moan is beyond me - they created the rules.

          Answer?  simplify the 13m of tax manuals into a set of black & white rules that can be easily interpreted and applies to all.

          Lewis Hamilton 'dodged' VAT on private jet
          F1 champion received a £3.3m refund after importing the red Challenger 605 into the Isle of Man.
        • PRO
          Personally I couldn’t care less if he flys around all week in it as well!
          You’ve not answered my question though!
          Lewis Hamilton 'dodged' VAT on private jet
          F1 champion received a £3.3m refund after importing the red Challenger 605 into the Isle of Man.
          • PRO

            I think the point is you're not allowed to claim all the vat back as a business expense if you use it 50% of the time for pleasure. 

            There goes my Superbike for doing quotes on! 

            Lewis Hamilton 'dodged' VAT on private jet
            F1 champion received a £3.3m refund after importing the red Challenger 605 into the Isle of Man.
  • I have been giving this alot of thought and I agree with Dans comments regarding an increase in the cash element thus blowing lots of us out of the water.  I was talking to a builder about this and their look of concern as they realised their subby's wage bill was about to go up by 20% was interesting.  But i suspect the government are going after all these so called consultants that work for multinational companies but are really only paying a minimal amount of tax but also lots less NI!  Its just the rest of us have to suffer!

    Unless its a bid to rid the country of sole traders?  Do the government want us to all work for a company and they can keep a better eye on us? Certainly cash is not the way forward. 

  • PRO

    The OTS’s finale report hads been released ( all 85 pages ) and makes interesting reading.

    It identifies all the issues faced by businesses under the various options they have identified.

    The Govermnent now needs to digest the final report with all the pros & cons and decide a way forward.

    Interesting times for SMEs 

    • PRO

      anyone hazard a guess as to percentage of Landscape Juice members VAT and non VAT registered ?

  • PRO
    Ben, VAT is a very clever tax, the builder would reclaim the VAT the subbies invoice, then recharge on the customers invoice. That means the tax is added onto the added value of the subbies work.

    At each transaction VAT is reclaimed on the supply then added to the final invoice, so there is an incremental increase in the VAT.

    If the VAT was not reclaimed the tax would compound and the final invoice could be for an astronomical amount, the economy and the country would collapse under the tax burden.

    Andy
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