the threshold for compulsory registration is £60,000
the threshold for voluntary deregistration is £58,000.
Avoidance scheme disclosure rules

New rules are to be introduced requiring businesses to disclose when they use or are party to schemes that give a tax advantage that does not appear on their VAT returns, eg in relation to VAT that cannot be deducted because it relates to exempt supplies or non-business activities.

Other VAT measures
Changes to the partial exemption scheme rules which will affect those businesses using a ‘special method’. In addition the benefit of rounding up in the standard method for large businesses whose residual input tax is more than £400,000 per month is removed.
Local authority provision of certain services, such as childcare and welfare, will be reclassified as non-business rather than an exempt activity for VAT purposes from 1 April 2005. This will remove the restriction on VAT refunds.

An extension to the list of energy saving materials qualifying for the 5% reduced rate on installation.

Extending the ‘unjust enrichment’ provisions so that no business can unfairly benefit from charging too much VAT.

Consultation on the introduction of a 5% reduced rate of VAT, for welfare charities and ‘state regulated’ welfare providers, on certain services in connection with the welfare of the elderly, disabled or children.

The government is seeking to agree a 5% rate on the VAT costs incurred by charities in the construction, renovation and maintenance of memorials. In the meantime an interim grant scheme will be introduced.

The extension of the listed places of worship scheme for three years until 2007/08 unless a permanent reduced rate is achieved earlier.

Proposals to reform the VAT fuel scale charge to a CO2 emissions basis.
Vehicle Excise Duty (VED)

VED is frozen for the four least polluting CO2 bands and increased by the standard £5 for the two most polluting bands, as well as for cars and light goods vehicles of over 1549cc registered before 1 March 2001. Changes take effect for licences commencing on or after 1 April 2005.

Fuel duty
Excise duty rates on main road fuels will be increased by 1.22 pence per litre in line with inflation from 1 September 2005.

Landfill tax
The standard rate of landfill tax has been increased to £18 per tonne from 1 April 2005. The lower rate for inactive waste remains at £2 per tonne.