VAT threshold

[fillyboy]

Doesn't effect me as I'm retired, but I read earlier Labour are considering lowering the VAT threshold from £90k to £30K
At that level it would surely pull in almost every small/sole trader in construction trades. If this did happen, surely the result would be devastating for both sole traders and consumers alike.

 

[carmanmemoranda]

Why ?

It's not exactly high now.

 

[fillyboy]

Why ?

It's not exactly high now.

To pull in more tax revenue I suppose. They/we need the money but this is going to hit a lot of people.

 

[blup]

The threshold is much higher now than it used to be, and higher than European counterparts. There may be a sophisticated tax reason for it but I suspect the government is targeting the people that don’t/won't vote for them.

 

[Notch7]

but I suspect the government is targeting the people that don’t/won't vote for them.

Gammon plumbers vote Reform anyway so might as well pizz em off some more.

 

[fillyboy]

The threshold is much higher now than it used to be, and higher than European counterparts. There may be a sophisticated tax reason for it but I suspect the government is targeting the people that don’t/won't vote for them.

Just read that the UK vat threshold is the highest in Europe, didn't know that. It's certainly going to have an inflationary effect, it would be interesting to see some figures for the amount of revenue businesses below the threshold account for.

 

[Notch7]

To pull in more tax revenue I suppose. They/we need the money but this is going to hit a lot of people.

lots of self employed people are quite disorganised in terms of paperwork and just want a simple life being able to take a Tescos bag full of receipts to their accountant every year.

Making Tax Digital is already going to upset those people:

MTD income tax requirements will apply to those who receive gross income from self-employment and/or property over a certain threshold. From April 2026 those with gross income of over £50,000 are mandated, from April 2027 those over £30,000 are mandated and from April 2028 those over £20,000 will be mandated.


And lowering VAT will add to the stress

 

[ellal]

Just read that the UK vat threshold is the highest in Europe, didn't know that. It's certainly going to have an inflationary effect, it would be interesting to see some figures for the amount of revenue businesses below the threshold account for.

More or less 'inflationary' than the additional VAT costs as a consequence of brexit?

 

[Notch7]

Would it actually raise more money?

I can see more cash work being done….but now the tradesmen would get VAT back on the materials + not pay any income tax on his Labour

And if tradies become VAT registered, they would then be getting VAT back on all their tool purchases, and then there’s those materials which ‘accidentally’ get used on their own homes.


I reckon some tradesmen like a one man plumber, getting close to retirement might just say fek I’m gonna retire

 

[carmanmemoranda]

You need to look at it from a sole traders point of view too.

His prices for materials include the vat he has paid, but can't claim back.

The downsides are the paperwork and the cashflow.

90k is only around £350 day turnover (not income)

 

[fillyboy]

Would it actually raise more money?

I can see more cash work being done….but now the tradesmen would get VAT back on the materials + not pay any income tax on his Labour

And if tradies become VAT registered, they would then be getting VAT back on all their tool purchases, and then there’s those materials which ‘accidentally’ get used on their own homes.


I reckon some tradesmen like a one man plumber, getting close to retirement might just say fek I’m gonna retire

Spot on, I think with a threshold so low even self employed hairdressers could get pulled into the net and that digital malarkey will be a killer for some.

 

[motorbiking]

Would it actually raise more money?

I can see more cash work being done….but now the tradesmen would get VAT back on the materials + not pay any income tax on his Labour

And if tradies become VAT registered, they would then be getting VAT back on all their tool purchases, and then there’s those materials which ‘accidentally’ get used on their own homes.


I reckon some tradesmen like a one man plumber, getting close to retirement might just say fek I’m gonna retire

You do understand that a person in business is supposed to have higher revenue than costs?
The net result will be more VAT paid. That is the fairly obvious result of the lower threshold.

It would probably hit a lot of people with holiday rentals, buy to lets etc as well as plenty of one man traders. Those in the services industry would also be hit as their costs are typically labour.

 

[ReganAndCarter]

but I suspect the government is targeting the people that don’t/won't vote for them.

Probably about 97 per cent of the legitimate population then.

 

[ReganAndCarter]

Gammon plumbers vote Reform anyway so might as well pizz em off some more.

How old are you?

 

[ReganAndCarter]

Labour have gone after pensioners and the wealthy, now they're coming for the self employed or landlords. However, even working people (I'm assuming they mean wage slaves) whom they profess to stand up for are in their sights with NI rises, etc. Going to take a long time to rebuild UK PLC post 2029 - assuming these socialist Trots last till then.