Increasing the VAT Registration Threshold starting April 2024
Who is likely to be affected Small businesses with taxable supplies or EU acquisitions (in Northern Ireland) between £85,000 and £90,000.
Measure Overview Starting 1 April 2024, the UK increased the VAT registration threshold from £85,000 to £90,000. The deregistration threshold also rose from £83,000 to £88,000. For Northern Ireland, both registration and deregistration thresholds for acquisitions increased to £90,000. This adjustment, announced in the Spring Budget 2024, aims to alleviate administrative and financial burdens on small businesses.
Policy Objective The objective is to support small businesses by reducing the impact of VAT charges. At £90,000, the UK’s VAT registration threshold is the highest in the OECD, alongside Switzerland, and more than double the EU and OECD averages. This helps keep many small businesses exempt from VAT, minimizing their paperwork and financial strain.
Background The UK’s VAT registration threshold, now set at £90,000 per annum, means businesses with a turnover below this figure are not required to register for VAT, though they can opt to do so voluntarily. The deregistration threshold of £88,000 helps avoid the constant cycle of registering and deregistering for businesses hovering around the threshold.
Impacts and Benefits This change is expected to save businesses approximately £5 million per year in administrative costs. An estimated 28,000 micro businesses will no longer need to register for VAT in 2024-2025, with 14,000 fewer on average from 2024-2029. The policy has no significant macroeconomic impact and does not affect individuals or civil society organizations. This measure simplifies the tax process, making it easier for small businesses to operate without the additional burden of VAT registration.
Published 30.06.2024
Increasing the VAT Registration Threshold starting April 2024
Who is likely to be affected Small businesses with taxable supplies or EU acquisitions (in Northern Ireland) between £85,000 and £90,000.
Measure Overview Starting 1 April 2024, the UK increased the VAT registration threshold from £85,000 to £90,000. The deregistration threshold also rose from £83,000 to £88,000. For Northern Ireland, both registration and deregistration thresholds for acquisitions increased to £90,000. This adjustment, announced in the Spring Budget 2024, aims to alleviate administrative and financial burdens on small businesses.
Policy Objective The objective is to support small businesses by reducing the impact of VAT charges. At £90,000, the UK’s VAT registration threshold is the highest in the OECD, alongside Switzerland, and more than double the EU and OECD averages. This helps keep many small businesses exempt from VAT, minimizing their paperwork and financial strain.
Background The UK’s VAT registration threshold, now set at £90,000 per annum, means businesses with a turnover below this figure are not required to register for VAT, though they can opt to do so voluntarily. The deregistration threshold of £88,000 helps avoid the constant cycle of registering and deregistering for businesses hovering around the threshold.
Impacts and Benefits This change is expected to save businesses approximately £5 million per year in administrative costs. An estimated 28,000 micro businesses will no longer need to register for VAT in 2024-2025, with 14,000 fewer on average from 2024-2029. The policy has no significant macroeconomic impact and does not affect individuals or civil society organizations. This measure simplifies the tax process, making it easier for small businesses to operate without the additional burden of VAT registration.
Published 30.06.2024
Top Tips for Small Business Success: Optimizing Your Operations and Finances
Running a small business comes with its fair share of challenges, but with the right strategies, you can navigate them smoothly. Here are some top tips from Alerio Consulting to help you optimize your operations and achieve financial clarity.
1. Streamline Your Finances with Expert Accounting Services
Keeping your financial records accurate and up-to-date is crucial for making informed decisions. Comprehensive accounting services like bookkeeping, payroll, business income tax, and VAT compliance ensure your financial health is in check. Tailored solutions for sole traders and statutory financial accounting help you meet all regulatory requirements while optimizing performance.
2. Empower Your Business with Strategic Management Accounting
Strategic insights are key to driving growth and profitability. Management accounting services provide real-time data and performance metrics that enhance decision-making. Identify key improvement areas, track progress, and adjust strategies to stay on course, ensuring sustainable growth.
3. Plan for Success with Budgeting and Forecasting
Effective planning is essential for any business aiming to succeed. Budgeting and forecasting services offer a clear view of potential financial outcomes, allowing you to set realistic goals, anticipate challenges, and allocate resources efficiently. Understand your financial future to navigate uncertainties with confidence.
4. Optimize Operations with Process Re-engineering
Efficiency is crucial in a competitive market. Process re-engineering services analyze your current operations, identify inefficiencies, and implement improvements to maximize productivity. Whether it's reducing redundant tasks, improving workflow, or leveraging technology, create a more efficient and effective business environment.
5. Ensure Financial Stability with Cash Flow Analysis
Cash flow is the lifeblood of any business. Cash flow analysis services provide a clear picture of your liquidity and financial stability. Manage cash flow effectively to ensure you have the resources needed to sustain operations and invest in growth. Avoid cash shortages and make strategic decisions that support long-term success.
Why Choose Alerio Consulting?
At Alerio Consulting, we're more than accountants; we're your strategic partners. With a wealth of experience and a passion for helping small businesses succeed, we offer a collaborative and personalized approach. We build lasting relationships based on trust and transparency, making financial management simple and effective.
Focus on what you do best—running your business. Let Alerio Consulting handle the complexities of financial management and process optimization. Together, we’ll ensure your business achieves operational excellence and financial clarity.
For more expert tips and personalized solutions, get in touch with Alerio Consulting today! Let's take your business to the next level.
Published 26.06.2024