UK Compulsory VAT Registration Threshold Increased

Mar 11, 2024 | United Kingdom

UK Mandatory VAT registration Threshold

The UK’s current VAT threshold of £85,000 per annum is set to rise on 1st April 2024 to £90,000. The Chancellor initially wanted to hold the rise until April 2026 however the spike in inflation has caused many SME’s to breach the threshold. This will help reduce the number of micro-businesses required to register for VAT mandatory, although businesses can still choose to voluntarily register for UK VAT when under the threshold.

The de-registration threshold which is currently set at £83,000 will also rise to £88,000 in-line with the registration change, the de-registration threshold is set lower to avoid having businesses float around the threshold and having to register and de-register constantly. It’s worth to note that the UK does have the highest local VAT registration threshold when compared to members of the EU.

Threshold Change Limitations

The UK is still limited by EU rules due to the WIndsor framework and Northern Ireland protocal negotiated by Rishi Sunak meaning the UK must respect the EU’s VAT threshold when setting VAT rules in Norther Ireland. This is so tha businesses in Northern Ireland do not have a VAT advatange over EU Businesses.

This means that for Northerland Ireland the registration and de-registration thresholds for EC acquisitions will increase from £85,000 to £90,000.


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