VAT thresholds from 1 April 2017

The taxable turnover threshold for registering for VAT will increase from £83,000 to £85,000 from 1 April 2017. The threshold for deregistration will rise from £81,000 to £83,000.

Rates

The standard VAT rate will remain unchanged at 20% for most goods and services. The rate for some goods and services, such as children car seats and home energy will remain at a reduced rate of 5%.

VAT flat rate scheme

Businesses classified as ‘limited cost traders’ and eligible to use the flat rate scheme will have to account for VAT at 16.5% of their relevant gross turnover.

‘Limited cost traders’ are defined as those that spend:

  • less than 2% of their VAT inclusive turnover on goods in accounting, or
  • more than 2% of their VAT inclusive turnover but less than £1,000 a year.

Capital goods such as new equipment, food and drink and vehicles are excluded.

Contact us today to discuss how these changes may affect your business.

Gibson Booth Associates

Salary Solutions

payroll bureau

Financial Planning

Avensure

employment law