Spring Budget 2020 – VAT

It has been confirmed that the taxable turnover threshold, that determines whether businesses should be registered for VAT, will be frozen at £85,000 until 31 March 2022. The taxable turnover threshold that determines whether businesses can apply for deregistration will also be frozen at the current rate of £83,000 for the same time period.

Businesses are required to register for VAT if they meet either of the following two conditions:

  1. At the end of any month, the value of the taxable supplies made in the past 12 months or less has exceeded £85,000; or
  2. 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 £85,000.

In other VAT related Budget news, the Chancellor confirmed that from 1 January 2021 there will be no VAT whatsoever on women’s sanitary products. This will be put in place by the introduction of a new zero rate of VAT for women’s sanitary products, a move that would not have been possible whilst the UK was part of the EU.

In addition, a zero rate of VAT will apply to all e-books from 1 December 2020. This will mean that all e-books, e-newspapers, e-magazines and academic e-journals will have the same VAT treatment as their physical counterparts.

FROM LITTLE ACORNS

TO MIGHTY OAKS

Shaking The Money Tree

Relax… this book is unique, coming with access to help from a professional accountant who specialises in helping make businesses like yours more successful, more profitable and more enjoyable to run.