Revenue raises VAT registration threshold for small businesses
The Revenue Commissioners have confirmed an increase to the VAT registration threshold for small businesses, a change aimed at easing the administrative burden on sole traders and micro-enterprises whose turnover had crept past the previous limit largely due to inflation.
Who benefits from the change
The higher threshold means more small service providers and traders can remain outside the VAT system without needing to charge VAT on their sales or file regular returns, reducing paperwork for businesses operating close to the margin. Accountants say the adjustment is a welcome, if overdue, response to years of rising prices pushing more small operators over a threshold that had remained largely static.
What business owners should check
Businesses currently registered for VAT are advised to review their turnover projections for the year ahead to see whether deregistering makes sense, weighing the benefit of reduced administration against the loss of the ability to reclaim VAT on business purchases. Revenue has said guidance notes and updated turnover calculators will be published on its website ahead of the change taking effect.
Key facts
- Change: increase to VAT registration threshold
- Affected group: sole traders and micro-enterprises
- Main benefit: reduced filing and administrative burden
- Next step: updated Revenue guidance expected shortly
Business representative groups have welcomed the move but say they will continue to press for the threshold to be reviewed annually in line with inflation, rather than adjusted only periodically.