Finance Bill Tracking Service 2010 | Budget 2010


Who is likely to be affected?

1. Businesses whose taxable turnover is close to the current VAT thresholds for registration and deregistration.

General description of the measure

2. The measure increases the taxable turnover threshold, which determines whether a person must be registered for VAT, from £68,000 to £70, 000.

3. The taxable turnover threshold which determines whether a person may apply for deregistration will be increased from £66,000 to £68,000.

4. The registration and deregistration threshold for relevant acquisitions from other EU Member States will also be increased from £68,000 to £70, 000.

Operative date

5. The new registration and deregistration thresholds will have effect on and after 1 April 2010.

Current law and proposed revisions

6. The increase in the taxable turnover threshold means that a person will have to apply for registration if:

•    at the end of any month, the value of the taxable supplies made in the past 12 months or less has exceeded £70,000; or

•    at any time there are reasonable grounds for believing that the value of taxable supplies to be made in the next 30 days alone will exceed £70,000.

7. If, at the end of any month, a person's taxable turnover in the past 12 months or less exceeds £70,000 but HM Revenue & Customs is satisfied that it will not exceed £68,000 in the next 12 months, that person will not have to be registered.

8. Schedules 1 and 3 to the VAT Act 1994 have been amended by a statutory instrument laid today to give effect to these changes.

9. The existing conditions for determining entitlement or liability to deregistration remain unchanged.

Further advice

10. If you have any questions about this change, please contact the VAT Helpline on 0845 010 9000. Information about Budget measures is available on the HM Revenue & Customs website at