44,000 Small Firms ‘will Cut Revenue Due to EIGHT-YEAR VAT Threshold Freeze’

More than 40,000 small firms will deliberately cut revenues due to the eight-year freeze in the VAT threshold, according to the Treasury’s own watchdog.

The OBR has warned of increasing ‘distortion’ being caused by the plan to hold the turnover level for registration at £85,000.

The pause began in 2017-18, and by the time it is due to end in March 2026 some 44,000 are expected to be ‘capping’ their income to avoid the red tape of joining the VAT system.



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