VAT: no change in registration and deregistration thresholds

The VAT registration and deregistration thresholds will not be uprated for a period of two years. There will be no revisions to existing legislation and no new legal provisions will be introduced.

Therefore legislation will continue as follows:

  • the taxable turnover threshold that determines whether a person must be registered for VAT will remain at £85,000;
  • the taxable turnover threshold that determines whether a person may apply for deregistration will remain at £83,000;
  • the registration and deregistration threshold for relevant acquisitions from other EU Member States will also remain at £85,000.

The two year period ends on 31 March 2020.

The government has confirmed that it will consult on the design of the VAT threshold.

VAT: extending joint and several liability for online marketplaces and displaying VAT numbers online

The existing joint and several liability legislation is to be extended. The following changes will apply from Royal Assent to Finance Bill 2017-18:

  • HMRC will be able to hold online marketplaces jointly and severally liable for any future unpaid VAT of a UK business arising from sales of goods in the UK via that online marketplace;
  • HMRC will be able to hold online marketplaces jointly and severally liable for any unpaid VAT of a non-UK business arising from sales of goods in the UK via that online marketplace where that marketplace knew or should have known that the non-UK business should be registered for VAT in the UK;
  • online marketplaces will be required to display a valid VAT number for all their sellers using their platform, when they are provided with one. They will also be required to ensure that VAT numbers displayed on their website are valid. This ensures that fictitious and hijacked VAT numbers are not displayed. These requirements will be supported by a penalty.

The legislation will only apply to those businesses who are not compliant with their VAT obligations and HMRC will only issue notices to online marketplaces where they are satisfied that a business is non-compliant.

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