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Not difficult to imagine that a reduction in the VAT threshold would lead to a substantial reduction in the tax take as people who don't have to charge VAT would walk away from a market which wouldn't afford them an decide to put the money in their back pockets instead. HMRC are too incompetent to realise this or do anything about it if they did and Politicians are too busy employing their cleaners etc. without conforming to PAYE rules or immigration rules.
It's about time that the people in the Treasury woke up to the fact that if you increase taxes you give people a bigger incentive to accept cash in the hand and ignore the taxman. But I suppose if you have a large salary and a large civil service pension why on earth would you care.
Sorry if that sounds extremely cynical but I suspect most of us will have seen the effects of high taxation over the years.
By the way does anyone else find it difficult to respond to AW as I keep getting an error message suggesting AW's IP address isn't available
Hi tedbuck,
Sorry you're getting an error message. I'll check with our tech team to see if anything's going on in the background and report back.
All the best,
Tom
I dont know the answer but there is a big anomally when the business crosses the threshold. It may be that the government will do nothing bu7t keep the current threshold which over time will be worth less and less.
Some comentators have made the point that lowering the threshold with lead to more cash in hand. Many non-registered businesses pay VAT which they cant claim so I do wonder what the net effect of bringing them into the VAT scheme. I suspect the flat rate % would be actual cost to the business.
With the UK needing to raise tax revenue we may hate the idea but I suspect more businesses over time will be subject to VAT
Is this an institute that someone made up last Wednesday in the pub with the constitution written on the back of a beer mat?
It was formerly the Professional Contractors Group. They have been around for a while now (not making any comment on whether that makes a difference on whether they should be taken seriously or not)
Extract above
'lowering the VAT threshold to around the UK’s national average wage (£26,000).'
I have never heard of anything so bloody stupid in my life, like HMRC could cope with around double the amount of Vat returns, all those Vat 1 applications forms they would fail to process properly.
As i always say i would take the vat limit to £150,000 take all of the small guys out of it, but leave a voluntary option.