Value added tax (VAT)

Registration and deregistration thresholds

Until 31 March 2024 the VAT registration threshold will remain at £85,000 and the deregistration threshold will stay at £83,000.

VAT deferral new payment scheme

As previously announced, businesses that deferred VAT payments due between 20 March and 30 June 2020 will be able to pay them in 8 to 11 interest-free equal monthly instalments up to 31 March 2022.

Businesses may opt into the scheme until June 2021 and the number of instalments depends on the date of opting in. Businesses that do not choose this option must pay deferred VAT by 31 March 2021. A penalty will be charged where the deferred VAT is not paid or there is no arrangement to pay.

Tourism and hospitality

The temporary reduced rate of 5% for hospitality, holiday accommodation and attractions is extended until 30 September 2021. A new reduced rate of 12.5% will apply from 1 October 2021 to 31 March 2022, at which point the rate will revert to the 20% standard rate.

Making tax digital (MTD)

MTD will be extended to all VAT registered businesses with effect from 1 April 2022, as previously announced.


THINK AHEAD
VAT rules on cross-border trading have changed following the end of the EU exit transition period. Make sure you understand how your business has been affected.
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