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MTD for VAT & Brexit

VAT registration limit may have to be reduced

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It seems that the EU will introduce a new VAT directive for small business. One point is that there will be a maximum VAT registration limit of 85,000 Euros (£76,300). Not a problem for any other EU members except the UK, as has already been noted our limit is the highest in Europe and probably the world.

https://publications.parliament.uk/pa/cm201719/cmselect/cmeuleg/301-xlviii/30109.htm

If we have a no deal Brexit then we don't have to worry about this but if there is some sort of deal then this may have to become UK law ( or NI law).

If the registration limit is reduced then more businesses in MTD for VAT....

So AWebbers we have a potential item involving both MTD and Brexit

 

Replies (5)

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By Open all hours
28th Dec 2018 21:21

Isn’t this just a variation on Philip Hammond, 2017?
Right now the £85K is on hold until our own government have the ‘courage’ to reduce it in 2022.
The Brexit aspect may be new but it doesnt feel like original thinking at all.

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By johnhemming
29th Dec 2018 07:26

About half of VAT registered businesses are voluntarily registered. I don't know how many businesses that are not registered for VAT would be required to register if the threshold was dropped say to 70K.

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Replying to johnhemming:
RLI
By lionofludesch
29th Dec 2018 12:26

I don't either but VAT would effectively become a tax on retailers. Some sectors - catering, in particular - would be hit hard. Possibly to the extent of pushing them out of business as they wouldn't be able to withstand the hit in the short term.

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By andyjdicker
02nd Jan 2019 09:03

johnhemming wrote:

About half of VAT registered businesses are voluntarily registered. I don't know how many businesses that are not registered for VAT would be required to register if the threshold was dropped say to 70K.

Bear in mind, its worked into the system that a lot of sole traders 'work to' the limit to trade just under it.

It's a silly way of thinking, but it's common.

If the limit is reduced then a lot of people will be forced to either drop their turnover or register.

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Replying to andyjdicker:
RLI
By lionofludesch
02nd Jan 2019 09:26

andyjdicker wrote:

Bear in mind, its worked into the system that a lot of sole traders 'work to' the limit to trade just under it.

It's a silly way of thinking, but it's common.

If the limit is reduced then a lot of people will be forced to either drop their turnover or register.

You think so ? You're running a chip shop, you're taking £84999, then you take that extra £1 and suddenly you're taking £70833.

How many businesses can stand that £14000 hit ?

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