The Spring Budget 2024 announced an increase to the VAT threshold from £85,000 to £90,000, effective from 1st April 2024. This adjustment will exempt approximately 28,000 small businesses from paying VAT altogether.
In addition, the 12-month taxable turnover threshold which determines whether a person may apply for deregistration will increase from £83,000 to £88,000.
The threshold for deregistration is lower than that for registration to avoid businesses that are trading around the threshold amount to constantly need to register and deregister.
These measures will support small businesses with the administrative and financial impact of VAT charges and businesses can opt to register voluntarily for VAT if their taxable turnover is below the threshold.
