The VAT registration threshold has already been frozen at £85,000 since April 2017 and it will now be fixed at that level until April 2026.

The Chancellor made the point that the UK’s VAT registration threshold is more than twice as high as the average in OECD and EU countries so be prepared for this threshold to be cut in the future.

The VAT threshold freeze will drag many more busi­nesses into compulsory VAT registration if they in­crease their prices with inflation which is now run­ning at over 11%.

Once a business is registered for VAT it must keep digital records and submit VAT returns using mak­ing tax digital (MTD) compatible software unless the business owner can show that they are digitally excluded.

There have been some teething prob­lems with the new VAT registration process and it can take many weeks to receive a new VAT number. You need to act quickly to register for VAT once your turnover for the previous 12 months ex­ceeds £85,000 or it is expected to exceed that level in the next 30 days. There are significant penalties for late registration.

We can help you with VAT registration and to com­ply with MTD.