Hammond tipped to offer VAT reprieve

One or two of the ways due to be proposed today to reform VAT to help small companies appears to have already impressed Philip Hammond.

So much so, it seems, that the chancellor’s Treasury will reportedly freeze or lower the VAT threshold, presumably at Autumn Budget 2017, while all of the ways can be considered.

Cutting the threshold to £25,000 could yield as much as £2billion but would mean 1.5million more traders would have to collect it, reported The Times, which obtained the tip-off.

Conversely, raising the threshold to £90,000 (from £85,000 currently) was projected to cost the public purse up to £100million, while removing 30,000 companies from VAT’s scope.

The need for reform stems from concerns that the growth of traders is being stunted by the current threshold, with firms apparently shutting up shop for a month to stay VAT exempt.

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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