Change To VAT Registration Threshold

The VAT registration threshold, which had been frozen at £85,000 since 2017, was unexpected adjusted by the Chancellor, resulting in an increase to £90,000, effective from 1 April 2024.

Moreover, as of the same date, the threshold for taxable turnover determining eligibility for deregistration has also risen from £83,000 to £88,000.

Notably, for Northern Ireland, the registration and deregistration thresholds for EU acquisitions have been raised from £85,000 to £90,000, aligning with the changes in the rest of the UK.

This adjustment can have significant implications for businesses, particularly those in customer-facing sectors such as coffee shops and sandwich outlets. Maintaining turnover just below the VAT registration threshold may offer a sense of financial comfort but crossing that threshold can drastically alter a business's financial landscape and operational viability.

It's essential for businesses to stay informed about VAT regulations and thresholds, as failure to comply can result in penalties and legal consequences. Regularly reviewing your business's financial performance in relation to VAT thresholds and seeking professional advice can help navigate these complexities effectively.

If you require guidance on understanding the impact of these VAT changes on your business and ensuring compliance with the updated thresholds, Scotia Financial offers expert assistance and tailored solutions to address your VAT-related queries and concerns.

Contact us for personalized support and insights tailored to your business needs.