A FREEZE in the VAT registration threshold will "boost confidence across the small business community" according to the FSB (Federation of Small Businesses).
In his annual Budget speech Chancellor Philip Hammond decided against bringing down the current threshold of £85,000 to come in line with other European countries.
The UK threshold is currently the highest in the European Union, with the Germany threshold just £15,600 and it had been widely anticipated a reduction was on the cards.
Northern Ireland policy chair at the FSB, Wilfred Mitchell expressed relief the threshold remained unchanged.
“Tens of thousands of modest-earning Northern Ireland firms and self-employed people will be relieved that FSB’s lobbying has successfully seen off a VAT tax grab that would have caused huge economic damage," he said.
David Reaney, director of indirect tax at EY said a reduction in the VAT registration threshold proved a "step too far" in this Budget.
"In addition to pulling small businesses into the VAT system this would have brought huge additional challenges for Making Tax Digital and managing Brexit. I don’t expect a change to the threshold for the foreseeable future."
Tax specialist at Perrys chartered accountants, Craig Harmon expects that changes may come down the line "over the next couple of years", but warned of the impact.
"Any decrease in the threshold could place a significant tax and compliance burden on the smallest businesses."
