Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what recent assessment he has made of the impact of the VAT threshold on small business growth.

The UK has a higher VAT registration threshold than any EU member state and second highest in the OECD – which keeps the majority of UK businesses out of VAT altogether.

The Government have also put in place a generous package of Business Rates relief worth £13.6 billion.

The Government has demonstrated its long-standing commitment to supporting small businesses. At Spring Budget, the Government confirmed that, from April 2023, the Small Profits Rate will mean 70 per cent of businesses will see no increase in Corporation Tax this April. In fact, the UK has the lowest corporation tax rate in the G7.

In addition, the Government continues to invest in the 38 Growth Hubs providing businesses across England with free one-to-one support and advice. Growth Hubs offer a triage, diagnostic and signposting service to make sure that all businesses, whatever their size or sector, know what help is available and can access the most appropriate support.

While the Government keeps all taxes under review, it was announced at Autumn Budget 2022 that the VAT threshold will be maintained at its current level of £85,000 until 31 March 2026.