Budget 2016: Changes to Registration and Deregistration Thresholds for VAT

Following the delivery of the 2016 budget, VAT thresholds relating to the registration of businesses making taxable supplies and the VAT threshold for the deregistration of businesses have increased in line with inflation. The changes are as follows;  

-          The VAT registration threshold for the registration of business has increased from £82,000 to £83,000. Businesses will be expected to account for VAT once the value of taxable supplies in a 12 month period exceeds this threshold. Businesses may still register for VAT voluntarily even if their value of taxable supplies is below the threshold.

-          VAT registered businesses may deregister from VAT if the value taxable supplies in the previous 12 months is below £81,000 – this figure was previously £80,000.

-          Further to this, there has also been an increase in the registration and deregistration thresholds for EU acquisitions, in line with the changes to the VAT registration threshold set out above.

 The changes to the existing thresholds will come into effect from the 1st April 2016 and so if you are part of a small business and believe you may be affected by the changes in the relevant thresholds, clarify your position prior to this date by speaking to one of our experienced VAT consultants on our free helpline.

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