Data published by HMRC has revealed that the Revenue collected a record £133 billion in VAT during the 2018/19 tax period.
HMRC has revealed that the total VAT receipts increased by 5.3% in 2018/19 when compared to the previous financial year. As shown in the data, incorporated businesses accounted for the largest share of the VAT population and annual taxable turnover.
Sole proprietors then made up the second largest group in regard to VAT population. This group constituted 17% of VAT traders.
Also, the data showed that the wholesale and retail sector contributed the largest amount to the total VAT liability. Whereas, net home VAT liabilities totalled £28 billion, equating to 27% of the total VAT liability for 2018/19. Net home VAT payments declared by VAT payers amounted to £178 billion in 2018/19.
Furthermore, the number of VAT de-registrations decreased in the 2018/19 tax year. HMRC suggested that his may have been caused by the freeze in the VAT deregistration threshold that occurred last year.
Quote from Nigel Holland:
“With the introduction of Making Tax Digital for VAT, more people will be paying the correct amount of VAT. This increase in VAT could be due to businesses that previously understated their VAT bills having to now pay the correct amount.”