Tim Leunig’s Policy Substack

Tim Leunig’s Policy Substack

What to do about the VAT threshold

An alternative way to think about it

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Tim Leunig
Jun 30, 2025
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Photo by StellrWeb on Unsplash

In the UK a company must register for VAT when turnover exceeds £90,000. This threshold has lots of bad consequences. It deters small firms from growing. Take on an extra contract, and suddenly you must raise prices 20% or see your margins suffer. Around one in five businesses close to the VAT threshold turn down work each …

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