Make the vat threshold for business staggered e.g. Turnover up to 70k = 5% up to 140k = 10% over 140k = 15% and make the de-registration rate the same as the registration rate.

Why is this idea important?

The current system is a large obstacle for small businesses to consider taking on new employees and expanding the business as the jump from no vat to full vat can completely wipe out any potential profit especially in the service industry. Staggering the vat would allow business to enter the vat system gradually and help keep costs under control.The de-registration rate is also a big problem as if a business enters into vat and then looses a member of staff they will continue to pay vat even if their weekly turnover has fallen significantly until it reaches the de-registration threshold which is currently set at 2k below the registration threshold.

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