News

VAT

As previously announced, the VAT registration and deregistration thresholds will not change for 2 years from 1 April 2022, giving businesses certainty.

The taxable turnover threshold, which determines whether a person must be registered for VAT, will remain at £85,000.

The taxable turnover threshold for deregistration will remain at £83,000.  Unfortunately, there was no extension to the temporary reduced rate of 12.5% VAT for goods and services supplied by the tourism and hospitality sector. This will end on 31 March 2022 with the VAT rate returning to 20%.  The Government will reverse a Court of Justice of the European Union ruling that restricted the application of VAT relief on the installation of energy saving materials (ESMs).  This will mean wind and water turbines will be added to the list of ESMs and the complex eligibility conditions will be removed.

The Government will also increase the relief further by introducing a time-limited VAT zero rate for the installation of ESMs which includes solar panels, heat pumps and insulation. These changes will take effect from April 2022.

Alcohol Duties

To support the hospitality industry, alcohol duty rates on beer, cider, wine and spirits are frozen.

Vehicle and Fuel Duties

The Government announced that in response to fuel prices reaching their highest ever levels, there will be a temporary 12-month cut to duty from 6pm on 23 March on petrol and diesel of 5p per litre.  This measure represents a tax cut of around £2.4 billion over the next year and will save the average UK car driver around £100, van driver around £200 and haulier around £1,500, based on average fuel consumption.

For more details on what was announced in the 2022 Spring Budget in relation to VAT and other duties, do not hesitate to give one of our specialist advisers a call.