Angus MacDonald MP: speeches

Speeches

• 24 Jun 2025 · VAT Registration Threshold: SMEs · Hansard source

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  Thank you for allowing me to speak, Mr Vickers, after I turned up late. Few people can speak about VAT with such excitement as I can. I was UK entrepreneur of the year, I have lectured on entrepreneurship for 20 years, and I have mentored many early-stage businesses. I have concluded that the one thing we can do that could transform the small business community is to increase the VAT registration threshold to allow microbusinesses to scale up. Has anyone tried to get hold of a tradesman recently—a plumber, a decorator or an electrician? I will use the collective word plumber, to make it easier for people of my mentality to understand. There is an army of plumbers —mostly men who work alone—who seem incredibly hard to get hold of. They tend to be older, they learned on the tools or at a technical college, and they are happy to limit their income to squeeze below the £90,000 VAT restriction. There are many who, looking for a bit of holiday money, might do a job on the side for cash. There is a real shortage of plumbers, joiners and electricians, in part due to the closing down of technical colleges, and the young pursuing non-vocational degrees while loading themselves with student debt. Historically and internationally, skilled tradespeople have been held in great esteem, although not so much in today’s Britain. We all know good tradespeople with a great client list and reputation, all of whom make excellent money and are their own boss. An early learn for all those people is that the VAT registration threshold is essential: they need to pay 20% beyond that £90,000. My key point is that these sole traders will not take on an apprentice or an assistant, because that would take them over the VAT starting point. Not being VAT-registered is a fantastic advantage for a person. He or she has a 20% advantage over competitors who have several staff. In addition, the sort of person who likes being on the tools is not the sort of person who would relish the additional paperwork of being VAT-registered. It is not only doing the VAT paperwork that puts sole traders off growing their business; it is the real burden of hiring people, the payroll, the contracts of employment and the HR responsibilities. We need to make it worth their while, so an increase of a few tens of thousands will not do the job. There are 4.4 million self-employed people in the UK; just think what a catapult forward for our economy we would see if only 10% of them were to hire a couple of people. I propose that the VAT starting level be increased from £90,000 to £250,000 for all businesses. If that happened, I predict that a massive number of microbusinesses would hire an apprentice or two, creating a pool of young plumbers getting trained. As the availability of plumbers increased, householders would get work done quicker, there would be more competition and therefore lower charges, and clients would be happier. Small businesses, having built up a bit of a scale with three employees, might then grow into a proper business with 100 or more employees, like Pimlico Plumbers. It is believed that my proposal would cost the Treasury perhaps £2 billion in lost VAT, but I am sure that HMRC would win out overall. It would get income tax and national insurance from the newly-hired and well-paid staff, and the bigger companies would start paying corporation tax. It would also reduce the tax-avoidance cash economy. In my opinion, the 20% difference in the change from £90,000 to £250,000 would be easily made up. Arguments are made that we should drop the threshold to zero and make all sales subject to VAT, but that would be a massive disincentive to people starting a business. The results of my proposed VAT change would be more people in well-paid employment, a gateway for the young into an excellent career, a solution to skilled trade shortages, a stimulant to the economy, and higher tax collected by the Exchequer—a win-win. Why would we want to incentivise millions of people not to hire youngsters, not to grow their businesses and not to pay more tax?

• 18 Jun 2025 · Businesses in Rural Areas · Hansard source

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  I want to make the case for a review of the VAT system. VAT starts at £90,000 and above, and I think that that level should be increased to £250,000. The UK has 3.1 million sole traders. Many of them do not want to grow above £90,000 because they do not think they are in the business of administration, and quite a lot do cash business in March just to get past that. If we lift the limit to £250,000, many of them would employ an apprentice or two. Some might become quite major. We would enable a junior level of people who were not particularly good at school to join the trades sector, in plumbing, for example. This is a fantastic opportunity if we want to take the foot off the neck of micro-businesses and would allow us to grow a worthwhile SME sector.

• 11 Sept 2024 · Rural Depopulation · Hansard source

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  I thank the hon. Member for Na h-Eileanan an Iar (Torcuil Crichton) very much indeed for securing a debate on such an important subject. He consistently hits the nail on the head by bringing forward subjects that really matter to us. We have talked about accommodation, and the Highland council, on which I was a councillor, has £1.2 billion of borrowing, yet 40% of our housing budget is spent on interest payments. That is a catastrophe. Basically, we cannot borrow any more money to build more housing. The utility companies that are building renewable energy projects across the whole of the highlands need to build properties that will remain there for generations rather than modular housing for the extent of the jobs or projects, and the same should go for the owners of fish farms. It would make a big difference if the private and public sectors worked together, because I fear that public sector housing will not be able to fill the gap. Scotland has a £3.4 billion transport budget, but it is not coming to the highlands. The A82 up Loch Lomond must be one of the worst roads in the world; trucks cannot get past there. Mowi, the fish farm company, and BSW Timber just cannot operate safely, and it is extremely bad for the area. The railway from Glasgow to Mallaig has an average speed of just over 40 mph. This HS2 thing is a joke, and the ferries make Scotland a laughing stock. The Scottish Government have done no favours to the highlands and Scotland on connectivity over the last 17 years, and the same can be said for schools in the highlands. Schools such as Mallaig high school and Gairloch high school are less than 50% full—there is a complete collapse. As the numbers drop, we are losing the breadth of subjects taught by the teachers, so we are desperate for computing, mathematics and engineering teachers—they are the jobs of the future. The attainment gap in Scotland is a great shame for our country. Again, the Scottish Government’s management of our educational system has been catastrophic. Broadband coverage in Scotland is 96.8%, but in the highlands it is 86.6%. That is a disparity of almost 15%. Of course, we cannot have the jobs of the future if we do not have the connectivity. Places lose their population if the public sector pulls out, and that is what we are seeing. Eight care homes closed in the highlands in the two years that I was a highland councillor. People are getting shipped from the west coast of Skye up to Thurso or Inverness. There is a collapse in the care home sector. Care workers are being paid £12 an hour, which is less than they would get in the hospitality sector, and that is an increase on what it was before April. No wonder we have an absolute catastrophe in our care sector. Of course, we all know that the availability of dentists in the highlands is also a disaster. We have heard about the importance of allowing immigrants to come to Scotland. We are losing more than 50% of our young. They choose not to work in the highlands; they want to leave home. We need to keep these guys. We need to offer them well-paid jobs and good accommodation, and cherish them, otherwise they will leave. At the moment, they cannot get accommodation and they are not being taught for the jobs of the future. We are not helped by the Scottish Government, and we all have a big job to do together.