VAT Registration Threshold and the 2024 Autumn Budget
The 2024 autumn budget is on the horizon and there is a lot of buzz around the VAT registration threshold increase. At Essendon, we are exploring if it would be more benefit to the UK if the budget was made either lower or higher.
As with any budget changes, there are reasons for and against this increase and whether it will be of benefit to the individuals and the economy.
Reasons for Increasing the Threshold
Although it seems worse for the economy to increase the threshold, a study from 2022/2023 showed that 75% of the total VAT collected within the UK was paid by traders and businesses that turned over £10m. This suggests that the hit on the economy would be relatively low. If we weren’t bound by EU rules, we could take this a step further and increase the threshold much higher without it having too much of an impact on the economy.
This increase in the VAT registration threshold would also encourage businesses to grow further. Many businesses are teetering on the edge of the threshold simply because of tax reasons. Moving the threshold would encourage them to invest and grow which will do a lot for the economy as time goes on.
Reasons for Decreasing the Threshold
Of course, along with the reasons for increasing the threshold, there are also reasons not to increase or to decrease it further. One of the main reasons is that it is thought that a decrease would promote economic growth.
Research from 2016 shows that many businesses either closed for part of the year or refused work, suggesting that that businesses were actively managing their workload, prices and transactions to stay below the VAT threshold. Decreasing the threshold could therefore discourage this behaviour, encourage economic growth.
Increased or Decreased VAT Threshold – Which is better for the economy
There are pros and cons to either increasing or decreasing the threshold. It is, therefore, extremely important that both sides are carefully considered when deciding the fate of the business world.
If you think your business is going to be affected by the 2024 VAT threshold changes, please contact us today.
Read more from this issue...
Then vs Now
As we celebrate 10 years at Essendon, let’s take a moment to reflect on how things have changed since 2014. Remote Working In 2014, only 13.9% of people worked remotely – it was far from the norm. However, fast forward to 2024, after the pandemic and widespread office closures, that number has risen to 16%.
Continue reading…The Phishing-as-a-Service trend helping drive up cyber attacks
Guest article from Lionel Naidoo from Dragon IS – It’s Cyber Security Awareness Month, which once again shines a spotlight on the growing cyber threat facing businesses. Did you know, last year cybercriminals stole an estimated £30.5 billion from UK firms. The equivalent of almost £60,000 every minute! One of the most successful tactics
Continue reading…Celebrating a Decade of Business Finance Partnerships
This year marks a decade of Essendon Accounts & Tax, a remarkable voyage of growth through often challenging conditions. The team, passionate and often fuelled by endless cups of tea, have worked tirelessly to serve our clients. I applaud you all. I extend that to all my valuable network contacts too, you have all been
Continue reading…Tom Guthrie on The Red Sofa
Interviewer: Good morning and welcome to the red sofa. Today we have the pleasure of welcoming Tom Guthrie from BRI, who supports businesses who experience financial difficulties. Good morning, Tom. Tom: Good morning. Thank you for having me on the famous red sofa, Tom. Interviewer: Please give us a bit of background to BRI. Tom:
Continue reading…How to Plan for a Successful Shareholder Meeting: 6 Tips for Success
Depending on the type of business you operate, you may be experiencing the dread of shareholder meetings. Shareholder meetings are key to business success as they provide a time and space for shareholders to engage with directors and vice versa. We understand that these meetings can be daunting and difficult to plan, so we’ve shared
Continue reading…