Small firms spared VAT

THE owners of small businesses have breathed a sigh of relief after being granted a two-year reprieve from paying VAT.

Mr Hammond said firms making less than £85,000 a year would still be exempt from charging the sales tax until at least 2022.

There had been fears that the threshold could fall to £43,000, forcing up to 600,000 more small businesses to start paying.

Mike Cherry, of the Federation of Small Businesses, said: ‘Small firms up and down the country will be pleased to see the VAT threshold frozen for two years.’

He added that it had prevented ‘a mountain of bureaucracy and a tax hike’ for businesses.