Yesterday, Reform UK announced a fair deal for the white van man, promising to raise the VAT registration threshold from £90,000 to £150,000 and increase it in line with inflation going forward.
For too long, Britain’s tradesmen have been punished for working hard. Builders, plumbers, electricians and other self-employed workers have been trapped by a brutal VAT cliff edge that forces them to choose between growing their business and protecting their margins.
Currently, any business with a taxable turnover above £90,000 must register for VAT and start charging it on sales. That can suddenly make a small firm 20% more expensive to customers, or else force it to absorb the cost and slash its own margins. That is why so many tradesmen and small businesses turn down work, delay jobs or stop growing to avoid hitting the limit.
Reform UK will end that.
The policy is expected to cost £2.4 billion a year, though this is expected to fall closer to £2.1 billion once behaviour adjusts. But this is not money lost to the economy. It is money kept by the people who earned it: the tradesmen doing the work and the households hiring them.
The economic case is clear. When small businesses keep more of their own money, they can take on more work, hire more people and spend more in the wider economy. Around 44,000 firms are expected to be holding their revenue below £90,000 to avoid the VAT cliff edge, while another 280,000 firms currently generate revenue between £90,000 and £150,000. This intervention will therefore directly benefit 320,000 firms almost immediately.
The VAT threshold has become a tax on ambition. Since 2017, prices have risen by more than a third, while the threshold has crept up by just 6%, from £85,000 to £90,000. This is taxation by stealth. Rather than admitting they want higher taxes, successive governments have quietly allowed fiscal drag to eat into the earnings of honest tradesmen.
This is exactly the kind of freedom Brexit was supposed to deliver. EU law limits the VAT threshold to €100,000. Britain is no longer bound by that limit. Reform UK can now back working people and introduce Europe’s most competitive VAT regime.
While yesterday’s policy announcement focused on the white van man, the same cliff edge traps every small business. The hairdresser turning clients away to stay below the threshold, the coffee shop closing early to hold down its revenue. Lifting the threshold will allow businesses of all kinds to thrive, from florists to pedicurists.
Reform UK’s message is simple: if you work hard, build a business and serve your community, the tax system should not stand in your way.
Reform Leader Nigel Farage MP said:
“There are 3.2 million sole traders in Britain. Plumbers, electricians, builders, the people who actually keep the country running. In Wigan alone there are thousands of them, men like Robert Kenyon, who get up early, work hard and go to bed late. We call them alarm clock Britain. For decades the political establishment, of every stripe, has ignored them.”
“When we abolished tax on overtime we promised we would also deliver for the self-employed and those running small businesses. This is the first of those offers. The policy we have announced today will lift tens of thousands of sole traders out of VAT and end a brutal cliff edge.”
“To working Britain, our message is simple - employed or self-employed, we are on your side.”
For too long, Britain’s tradesmen have been punished for working hard. Builders, plumbers, electricians and other self-employed workers have been trapped by a brutal VAT cliff edge that forces them to choose between growing their business and protecting their margins.
Currently, any business with a taxable turnover above £90,000 must register for VAT and start charging it on sales. That can suddenly make a small firm 20% more expensive to customers, or else force it to absorb the cost and slash its own margins. That is why so many tradesmen and small businesses turn down work, delay jobs or stop growing to avoid hitting the limit.
Reform UK will end that.
The policy is expected to cost £2.4 billion a year, though this is expected to fall closer to £2.1 billion once behaviour adjusts. But this is not money lost to the economy. It is money kept by the people who earned it: the tradesmen doing the work and the households hiring them.
The economic case is clear. When small businesses keep more of their own money, they can take on more work, hire more people and spend more in the wider economy. Around 44,000 firms are expected to be holding their revenue below £90,000 to avoid the VAT cliff edge, while another 280,000 firms currently generate revenue between £90,000 and £150,000. This intervention will therefore directly benefit 320,000 firms almost immediately.
The VAT threshold has become a tax on ambition. Since 2017, prices have risen by more than a third, while the threshold has crept up by just 6%, from £85,000 to £90,000. This is taxation by stealth. Rather than admitting they want higher taxes, successive governments have quietly allowed fiscal drag to eat into the earnings of honest tradesmen.
This is exactly the kind of freedom Brexit was supposed to deliver. EU law limits the VAT threshold to €100,000. Britain is no longer bound by that limit. Reform UK can now back working people and introduce Europe’s most competitive VAT regime.
While yesterday’s policy announcement focused on the white van man, the same cliff edge traps every small business. The hairdresser turning clients away to stay below the threshold, the coffee shop closing early to hold down its revenue. Lifting the threshold will allow businesses of all kinds to thrive, from florists to pedicurists.
Reform UK’s message is simple: if you work hard, build a business and serve your community, the tax system should not stand in your way.
Reform Leader Nigel Farage MP said:
“There are 3.2 million sole traders in Britain. Plumbers, electricians, builders, the people who actually keep the country running. In Wigan alone there are thousands of them, men like Robert Kenyon, who get up early, work hard and go to bed late. We call them alarm clock Britain. For decades the political establishment, of every stripe, has ignored them.”
“When we abolished tax on overtime we promised we would also deliver for the self-employed and those running small businesses. This is the first of those offers. The policy we have announced today will lift tens of thousands of sole traders out of VAT and end a brutal cliff edge.”
“To working Britain, our message is simple - employed or self-employed, we are on your side.”
