Pre-filled with typical Retail figures: 12 employees, £25,000 average salary. Adjust the sliders for your actual numbers.
VAT Threshold Modeller
The OBR flagged the £90,000 VAT threshold as “anomalously high.” If it drops, businesses just below the current threshold could face significant margin erosion. Model the scenarios.
Scenario Comparison
Current threshold: £90,000. You are already VAT registered — these changes would not affect you.
If threshold drops to
£60,000
Already registered — no additional impact
If threshold drops to
£70,000
Already registered — no additional impact
If threshold drops to
£75,000
Already registered — no additional impact
Decision Window
Status: Consultation stage. No decision has been made. Earliest possible implementation would be April 2027. You have 12-18 months to model scenarios and adjust pricing.
Retail — Key Concerns
- VAT threshold changes could force registration for smaller independent retailers
- Business rates reform creates winners and losers — check if you qualify for lower multiplier
- Online retail faces higher rates multiplier under reform proposals
VAT Threshold Modeller for Other Industries
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FreshBooks
Accounting software built for small business owners. Invoicing, expenses, tax reporting — MTD-compatible from day one.
Start Your Free FreshBooks Trial →Frequently Asked Questions
- What is the current UK VAT threshold?
- The current VAT registration threshold is £90,000 of taxable turnover in a rolling 12-month period (2025/26).
- Will the VAT threshold change?
- The OBR has flagged the threshold as 'anomalously high' compared to international standards. A reduction to £60,000-£75,000 is under discussion but no decision has been made.
- What happens when I register for VAT?
- You must charge VAT on your sales (20% standard rate), submit quarterly VAT returns, and can reclaim VAT on business purchases. Your prices may need to increase.