Raise the VAT threshold to £125,000

Background

We believe SMEs are crippled by VAT paid on turnover, not profits, forcing them to either pass it to customers, risking loss, or cut prices to stay competitive, eating into profits.

Additional details

We believe raising the threshold to £125,000 will ease the burden on SMEs, allowing them to grow without fear of VAT registration at lower turnover levels. We think the current threshold forces businesses to increase prices, risking competitiveness, or absorb costs, cutting profits. Many SMEs cap growth to avoid VAT, hindering innovation and expansion. We think a higher threshold will reduce administrative burdens, support growth, and align with inflation, benefiting UK SMEs and the economy.

Where it’s popular

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