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Introduce increment VAT registration for small businesses

Comment 8th July 2010

Instead of having a binary VAT threshold for small businesses – one day you're selling without a 20% overhead on prices, the next day you are – make it possible to have small businesses nearing the threshold to incrementally add VAT so that VAT doesn't slam on the brakes of growth.

It would also discourage "creative" accounting and raise more tax revenue if handled more sensitively.

I propose that the VAT threshold is stunting the growth of many SMEs.

Why does this matter?

The VAT threshold is a brake on growth because it is introduced so suddenly on small businesses when they meet that threshold.

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