In a recent press release, HMRC underlined the benefits to smaller businesses from the increase in the VAT registration threshold and the business rates freeze.
Here’s what they said:
“Small businesses have received a boost as the VAT registration threshold is raised from £85,000 to £90,000, and £4.3 billion of business rates relief comes into force.
“Recognising the inflationary pressures facing small businesses, especially with energy bills, the Chancellor Jeremy Hunt announced a raft of measures to support them at Spring Budget, sticking to its plan to grow the economy and reward hard work. Raising the threshold will take 28,000 businesses out of paying VAT altogether, and ensure the UK has a higher threshold than any EU Member State and joint highest in the Organisation for Economic Co-operation and Development (OECD).
“The small business multiplier for business rates will also be frozen from today for a fourth consecutive year, protecting over a million ratepayers from a 6.6% increase in their bills. The measure is part of the £4.3 billion business rates support package announced at Autumn Statement that includes the 12-month extension of the 75% relief for 230,000 Retail, Hospitality and Leisure (RHL) properties…”.
In summary, the changes will result in:
- 28,000 small businesses freed from paying VAT, encouraging them to invest and grow as the threshold is raised from £85,000 to £90,000; and
- over one million properties protected from higher bills by freezing the small business rates multiplier for a fourth consecutive year.