Parliamentary Search

Written question asked by Angus MacDonald (Liberal Democrat) on Tuesday, 17 March 2026, in the House of Commons. It was due for an answer on Thursday, 19 March 2026. It was answered by Dan Tomlinson (Labour) on Thursday, 19 March 2026 on behalf of the Treasury.

Sole Traders: VAT

Question

To ask the Chancellor of the Exchequer, pursuant to her Oral Statement on Youth Unemployment, whether her Department has considered the benefits of raising the VAT Threshold to remove the potential barriers to sole traders taking on more work and hiring apprentices.

Answer

At £90,000, the UK has a higher VAT registration threshold than any EU country and the joint highest in the OECD. This means the majority of UK businesses are not in the VAT system at all, reducing administrative burdens and supporting their growth.

The Government’s approach to the VAT registration threshold aims to balance the impacts on small businesses, including their growth and financial sustainability, with the needs of the wider economy and the public finances. Increasing the VAT registration threshold would come at a significant fiscal cost and reduce the revenue available for vital public services.

More than £1.5 billion is being made available over the Spending Review period for investment in employment and skills support. This includes £725 million for the Growth and Skills Levy, to help support apprenticeships for young people and fully fund SME apprenticeships for under-25s.

Secondary information

Type
Written question
Reference
121642
Session
2024-26
Related items
Youth Unemployment
Tuesday, 17 March 2026
Parliamentary proceedings
House of Commons
Transferred
Yes
Subjects
Apprentices Employment Young people VAT Sole traders
Link
View this Written question on www.parliament.uk