Reform UK would raise the threshold at which sole traders start paying VAT to £150,000 to support “alarm clock Britain”.
Nigel Farage said the existing threshold of £90,000 acted as a “tax on ambition” because tens of thousands of firms were choosing not to expand, preferring to stay away from the tax cliff edge.
Businesses in EU states have to register for VAT when their turnover exceeds €100,000 (£86,300).
Mr Farage said because of Brexit, a Reform government would be able to raise the threshold to help lift a further 280,000 small businesses out of paying the 20 per cent levy.
In Britain, the threshold was raised from £85,000 to £90,000 in 2024 in the final months of Rishi Sunak’s premiership. Before that, previous Tory administrations had kept the threshold frozen since 2017.
Speaking before the Makerfield by-election on Thursday next week, Mr Farage 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
“To working Britain, our message is simple: employed or self-employed, we are on your side.”
Raising the VAT threshold to £150,000 was one of the dozen of tax cuts proposed in Reform’s 2024 manifesto. The party later distanced itself from the manifesto after economists raised concerns the £90bn in tax cuts were not funded.
