44,000 small firms 'will cut revenue due to EIGHT-YEAR VAT threshold freeze' trends now
View
comments
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.
The firms - likely to be mostly sole traders - will be forgoing a total of £350million a year in revenues, according to the watchdog's estimates accompanying the Budget.
The details will raised fresh questions about Jeremy Hunt's claim to be pushing for growth - while at the same time using 'fiscal drag' to bring in huge sums in tax to balance the government's books.
The OBR has warned of increasing 'distortion' being caused by the plan to hold the turnover level for VAT registration at £85,000
