The Office of Tax Simplification (OTS) is the independent adviser to government on tax simplification. Today it has published its second Annual Report, covering the year to 31 March 2018. the most relevant section for CTG members focuses on VAT.

VAT 

At the request of the Chancellor, the OTS published a report on VAT which exposed the distorting cliff-edge effect of the registration threshold and within weeks led to the announcement of a major Government consultation around this issue, which was launched at Spring Statement 2018. The present high level of the threshold (by international standards) clearly keeps things simple for small businesses which have no reason to seek a turnover exceeding £85,000 a year; it equally clearly distorts behaviour and inhibits the growth of businesses.

The VAT report also drew out a total of 23 recommendations covering a wide range of other, sometimes longstanding, technical and operational concerns about the VAT system. These are forming the basis for a constructive ongoing dialogue with HMRC.

CTG’s response to the OTS VAT simplification review can be read here. Our response to the VAT registration threshold consultation (referenced above), can be read here.