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VAT Thresholds

The threshold that businesses must reach before they are required to pay VAT on their goods and services has risen from £64,000 to £67,000 with effect from 6th April 2008.

Businesses are expected to pay VAT when they meet one of the following two criteria:

- they have reached the end of any month and the total goods or services they have provided over the previous 12 months has reached or exceeded £67,000

or

- they expect that they will provide goods or services worth £67,000 over the next 30 days.

The taxable turnover for applying to deregister has also increased, from £62,000 to £65,000.

If a business’s turnover has exceeded £67,000 in the last 12 months but they expect it to drop below £65,000 in the forthcoming months, they may not be required to register for VAT provided they can prove this to HMRC.

This article has been provided by UK200Group.

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