As of April 1st 2024, measures outlined in the Chancellor’s Spring Budget came into play, providing much needed support to UK SMEs.
Small businesses across the UK will be pleased to hear that the VAT registration threshold has been raised from £85,000 to £90,000.
Moreover, business owners will be able to tap into a £4.3 billion pot which has been allocated for business rates relief.
What are the VAT Registration Threshold Requirements?
Registration for VAT is required if:
– Your total VAT taxable turnover in the past 12 months exceeded £90,000 (the current VAT threshold).
– You anticipate that your turnover will surpass £90,000 in the upcoming 30 days.
It’s mandatory to register for VAT if, at the conclusion of any given month, your VAT taxable turnover for the preceding 12 months exceeds £90,000.
Registration must be completed within 30 days following the month in which your turnover exceeded the threshold. Consequently, your VAT registration becomes effective on the first day of the second month after surpassing the threshold.
How Will the Increase of the VAT Registration Threshold Affect My Business?
As businesses continue to operate in tricky market conditions, the April changes are welcomed by companies across the UK.
Increasing the VAT threshold will exempt 28,000 businesses from the obligation to pay VAT, positioning the UK with a threshold superior to that of any EU Member State and on par with the highest in the Organisation for Economic Co-operation and Development (OECD).
What are Business Rates?
Business rates are a form of tax levied on a wide range of non-domestic properties including commercial spaces such as shops, offices, pubs, and industrial sites like warehouses and factories, as well as premises used for hospitality purposes like holiday rentals or guest houses.
Essentially, if a part or whole of a building is utilised for business operations, it typically incurs business rates.
It’s important to be aware that the system governing business rates varies significantly across the UK.
Specifically, properties located in Scotland and Northern Ireland are subject to different regulatory frameworks and procedures for managing business rates, setting them apart from the rest of the UK.
What Business Rate Relief is Available in 2024?
To help small businesses there are two main ways to help reduce business rate bills: using a lower multiplier to calculate the bill, and applying a discount to the bill depending on the rateable value.
The initiative – brought forward by the Spring Budget – incorporates both of these support mechanisms.
In a significant move to support the small business community, the government has announced that the small business multiplier for business rates will remain unchanged for the fourth year in a row.
This decision safeguards more than a million ratepayers from a potential 6.6% hike in their business rates bills.
This freeze is a key component of a broader £4.3 billion package aimed at providing relief to businesses, as unveiled during the Autumn Statement.
Included in this financial aid package is a 12-month extension of the 75% relief benefitting around 230,000 retail, hospitality, and leisure (RHL) establishments.
This relief measure, like the freeze on the small business multiplier, takes effect immediately, offering timely support to businesses navigating the financial landscape.
Small businesses access unsecured, fast funding from Got Capital. As an alternative lender, Got Capital offers financing solutions specifically designed for and catered to the needs of SMEs.
