VAT simplification: a call for reform – AAT Comment

The current VAT system, described as overly complex and burdensome, is seen as a significant obstacle for SMEs and a barrier to economic growth. Dougie comments that the new political landscape provides a unique opportunity to address these issues and implement meaningful reforms.

Suggested reforms

Some of these reforms could include:

• Increasing the VAT threshold significantly to benefit smaller traders, allowing them to focus more on growth and less on compliance.
• Increasing the threshold for the Capital Goods Scheme, allowing businesses to better invest in capital assets with VAT burdens.
• Expanding the scope of zero-rated goods and services to encourage consumer spending and support various sectors of the economy.

Dougie says: “None of these changes could be considered a ‘tax cut’ but would make the VAT system work more fairly, provide certainty for businesses and support the government’s stated aim of encouraging growth and investment.”

What’s next for VAT simplification?

VAT simplification is a necessary step towards fostering a more business-friendly environment in the UK. These proposed reforms aim to alleviate the tax burden on SMEs, promote investment, and stimulate economic growth, as well as making the tax system fairer for all. As the new Labour Government looks to implement its policies, Dougie believes prioritising VAT simplification could lead to significant long-term benefits for both businesses and the economy.

To read Dougie’s comments in more detail, read the full article on AAT Comment here.

For further advice on VAT compliance, get in touch with Dougie directly.