Reform UK proposes raising VAT threshold to £150,000

Reform UK has announced a proposal to increase the VAT registration threshold for small businesses from £90,000 to £150,000. The party, led by Nigel Farage, stated that this tax break aims to create a "fair deal for the White Van man" and enhance the UK's competitiveness, drawing a comparison to the EU's VAT threshold limit of €100,000.

The party estimates the policy will cost the government over £2 billion initially, but anticipates long-term fiscal benefits from a productivity boost across the economy. Short-term funding is proposed through planned spending reductions in civil service, welfare, and net zero policies. Officials suggested that the tax break would provide immediate assistance to approximately 320,000 firms.

Farage commented that the proposals would help sole traders and end a "brutal cliff edge." He had previously suggested raising the threshold to around £160,000, noting that many small, one or two-person businesses struggle with the current limit. The announcement comes a week before the Makerfield by-election, where a Reform UK candidate is standing against Andy Burnham.