Spring Budget 2024 – VAT measures
7 March 2024| CATEGORIES: Budget, VAT registration threshold, VAT-free shopping| TAGS: Spring Budget 2024, tax-free shopping, VAT registration threshold
The Chancellor of the Exchequer, Jeremy Hunt, presented his Spring Budget to the House of Commons on 6 March 2024.
The main points of interest from a VAT perspective are set out below.
VAT registration threshold increased
The taxable turnover threshold which determines whether a person must be registered for VAT, will be increased from £85,000 to £90,000.
The taxable turnover threshold which determines whether a person may apply for deregistration will be increased from £83,000 to £88,000.
These changes will be effective from 1 April 2024.
HMRC estimates over 28,000 businesses will benefit in 2024-25 from no longer being VAT registered.
Trades in Carbon Credits to be brought within the scope of the VAT Terminal Markets Order (TMO)
The government will introduce legislation in Spring Finance Bill 2024 that underpins the VAT Terminal Markets Order (TMO) which will take effect from the date of Royal Assent. This will allow for further reform, including bringing trades in carbon credits within the scope of the TMO in due course, and forms part of the government’s broader commitment to update the TMO legislation.
A summary of responses to the consultation on reforming the TMO legislation, which was launched in 2023, will be published in due course.
VAT DIY Housebuilders Scheme: Power to request evidence
Following digitisation of the DIY Housebuilders Scheme, the government will introduce legislation in Spring Finance Bill 2024 to give HMRC Commissioners additional powers to request further evidential documentation in relation to a DIY housebuilder’s claim. This will assist the Commissioners in validating claims and carrying out compliance checks.
The power will come into force on the date of Royal Assent to Spring Finance Bill 2024 and will apply to claims made on or after the day the provisions come into force.
The tax information and impact note for this measure provides more information: VAT: DIY Housebuilders Scheme request for evidence.
VAT Treatment of Private Hire Vehicles
As announced at Autumn Statement 2023, the government will launch a consultation on the potential implications of the July 2023 High Court ruling in Uber Britannia vs Sefton MBC in April 2024.
VAT Retail Export Scheme
Following the Office for Budget Responsibility’s (OBR) review of the cost of the removal of the tax-free shopping scheme (see our earlier blog article for further information) , the Government will consider their findings alongside industry representations and broader data, and invites any further submissions.
The full set of Spring Budget 2024 documents are available here.