Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what data her Department has used to estimate the potential behavioural impacts of changes to the VAT registration threshold on small businesses.

The Government recognises the significant contribution made by small businesses to economic growth and life in the UK. Tax rates and thresholds are one of a range of factors that affect small businesses’ decisions on growth and recruitment, alongside wider economic conditions, demand and market considerations.

There is a range of views on the VAT registration threshold. Any consideration of changes to the threshold would have to carefully balance potential impacts on small businesses, the economy as a whole, and tax revenues. The Chancellor makes decisions on tax policy at fiscal events in the context of the overall public finances.