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Monday
Aug092010

FSB Moves to Get VAT Registration Level Increased

One thing we see a lot here at St Matthew is small businesses finding they are just over the tipping point at which they need to register for VAT.  Going over that threshold by a small amount can actually lead to a smaller income, because of the extra money which needs to be paid in VAT.

This is one of the reasons why the FSB – the Federation of Small Businesses – has said they want to see an increase in the level at which VAT registration must take place.

Businesses must currently register once their turnover – not their profit – reaches £70,000.  According to those in the FSB, this level should ideally be raised over time so that it reaches £90,000 – giving businesses the opportunity to bring in an extra £20,000 a year before having to worry about registering to pay VAT.

The FSB spoke out in the run up to the emergency Budget, commenting on the fact that an increase in VAT to 20% (which did in fact occur) could damage businesses if the government did not take measures in other places to compensate for it.

The FSB stands up for small businesses across the UK and I was encouraged to read their suggestions for the Budget.  Of course not all of them have been noted and acted upon.  I think the increase in the VAT registration level is particularly worth looking at, in order to make small businesses more competitive.  VAT can be complicated and finding out you are just over the threshold can be worrying for some companies.

If you have a small business and you are concerned about where you stand in relation to VAT registration, contact us here at St Matthew now for professional advice and input.

 



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