Protect Our Micro-Businesses

Do you know the government are proposing to reduce the VAT threshold from £90,000 to £30,000? 

Micro-businesses, sole traders, and local service providers are the heartbeat of our communities. We are the hairdressers, therapists, builders, shop workers and tradespeople who keep our high streets alive and our towns thriving.

These are the smallest and most vulnerable businesses, many run by one person and already managing rising costs and shrinking margins.

Not every business is trying to scale or expand. Thousands of micro-businesses depend on sustainability, stability and steady income, not rapid growth. We build our livelihoods around realistic workloads, consistent community demand and long-term wellbeing. Reducing the VAT threshold punishes these responsible, sustainable businesses simply for choosing stability over expansion.

For service-based businesses with almost no reclaimable VAT, the impact would be even harsher. This change would mean prices rising, customers turning away and livelihoods placed at risk. Many simply will not survive it.

The proposed change would force thousands of micro-businesses across the UK to register for VAT earlier than anticipated, burdening them with complex administrative responsibilities and additional financial liabilities. For businesses that operate on tighter profit margins, this could mean the difference between staying afloat and going under.

 According to the Federation of Small Businesses, approximately 3.5 million micro-businesses in the UK would be immediately affected by this reform. These are enterprises that often serve as the backbone of our communities employing local people and offering services crucial to daily life.

Moreover, the increased administrative burden could dissuade budding entrepreneurs from starting new ventures, stifling innovation and economic growth. Many small business owners do not have the resources to handle the complexities of VAT compliance, leading to higher operational costs or the need to hire external help, which is financially prohibitive for many.

While the intention behind the threshold reduction is to capture more businesses within the VAT system to boost revenue, this may inadvertently lead to business closures and reduced tax revenues in the long term a lose-lose situation for both businesses and government.

To support the resilience and growth of our micro and small businesses, we urge the government to reconsider this proposal. At the very least maintaining the current VAT registration threshold at £90,000 which is essential to protect small businesses from unnecessary strain and to ensure that these vital contributors to the economy can continue to thrive. Or even better consider increasing the threshold to a higher amount allowing space for growth for those who are more ambitiouswhich will in turn generate more taxable income

Please sign this petition to show your support for small business owners and urge the UK government to halt this proposed VAT threshold reduction. Together, we can stand up for micro-businesses and help maintain a thriving, diverse, and innovative business landscape in the UK.