- Many small firms and self-employed individuals are scaling back their operations to avoid reaching the VAT registration threshold of £85,000.
- The Federation of Small Businesses (FSB) is pushing for the threshold to be raised to £100,000.
- Two in five firms with a turnover between £75,001 and £100,000 see the current threshold as a barrier to growth.
- The FSB suggests implementing a smoothing mechanism or VAT allowance to ease the transition for businesses just above the threshold.
- The FSB also proposes a rebate system where businesses with a turnover up to £20,000 higher than the threshold can apply for a discount on their net VAT bill.
Source: heraldscotland.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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