Budget 2014 – VAT registration and deregistration thresholds
The taxable turnover threshold, that determines whether businesses should be registered for VAT, will increase from £79,000 to £81,000 from 1 April 2014. The taxable turnover threshold that determines whether businesses can apply for deregistration will be increased from £77,000 to £79,000 on the same date.
Businesses are required to register for VAT if they meet either of the following two conditions:
- At the end of any month, the value of the taxable supplies made in the past 12 months or less has exceeded £81,000; or
- At any time there are reasonable grounds for believing that the value of taxable supplies to be made in the next 30 days alone will exceed £81,000.
The registration and deregistration threshold for relevant acquisitions from other EU Member States will also be increased from £79,000 to £81,000.
A new scheme known as the cash basis and simplified expenses scheme was launched in April 2013 and allows sole traders and other unincorporated businesses to simplify their accounting processes. The threshold to use the scheme mirrors the VAT registration threshold and therefore will change to £81,000 from 1 April 2014.