VAT money

A Third of Micro Businesses Risk Penalties Due to Unpaid VAT

A Third of Micro Businesses Risk Penalties Due to Unpaid VAT

Over a third (36%) of micro businesses are unaware of the VAT threshold which could mean they have unintentionally not been paying their VAT bills to HM Revenue & Customs (HMRC), according to research by small business insurer Direct Line for Business. Of the micro companies (less than 10 employees) surveyed that are conscious of the threshold, one in 10 have purposely limited sales to avoid paying VAT – with 27% ceasing trading for a period in order to do so. According to the report, many small businesses choose to remain within the VAT limit in order to compete with other companies so as to keep their goods and services at a lower rate. The VAT threshold currently stands at £82,000. If a business’ turnover of VAT taxable goods and services (supplied within the UK) for the year prior ... »