VAT notches, voluntary registration, and bunching: Theory and UK evidence
Using adminstrative tax records for UK businesses, we document both bunching in annual turnover below the VAT registration threshold and persistent voluntary registration by almost half of the firms below the threshold. We develop a conceptual framework that can simultaneously explain these two appa...
| Main Authors: | , , , |
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| Format: | Journal article |
| Language: | English |
| Published: |
Massachusetts Institute of Technology Press
2019
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| _version_ | 1797057069622231040 |
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| author | Liu, L Lockwood, B Almunia, M Tam, H |
| author_facet | Liu, L Lockwood, B Almunia, M Tam, H |
| author_sort | Liu, L |
| collection | OXFORD |
| description | Using adminstrative tax records for UK businesses, we document both bunching in annual turnover below the VAT registration threshold and persistent voluntary registration by almost half of the firms below the threshold. We develop a conceptual framework that can simultaneously explain these two apparently conflicting facts. The framework also predicts that higher intermediate input shares, lower product-market competition and a lower share of business to consumer (B2C) sales lead to voluntary registration. The predictions are exactly the opposite for bunching. We test the theory using linked VAT and corporation tax records from 2004-2014, finding empirical support for these predictions. |
| first_indexed | 2024-03-06T19:31:04Z |
| format | Journal article |
| id | oxford-uuid:1d7beae7-73ee-4309-a2d7-934bd25a8dc1 |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-06T19:31:04Z |
| publishDate | 2019 |
| publisher | Massachusetts Institute of Technology Press |
| record_format | dspace |
| spelling | oxford-uuid:1d7beae7-73ee-4309-a2d7-934bd25a8dc12022-03-26T11:11:03ZVAT notches, voluntary registration, and bunching: Theory and UK evidenceJournal articlehttp://purl.org/coar/resource_type/c_dcae04bcuuid:1d7beae7-73ee-4309-a2d7-934bd25a8dc1EnglishSymplectic Elements at OxfordMassachusetts Institute of Technology Press2019Liu, LLockwood, BAlmunia, MTam, HUsing adminstrative tax records for UK businesses, we document both bunching in annual turnover below the VAT registration threshold and persistent voluntary registration by almost half of the firms below the threshold. We develop a conceptual framework that can simultaneously explain these two apparently conflicting facts. The framework also predicts that higher intermediate input shares, lower product-market competition and a lower share of business to consumer (B2C) sales lead to voluntary registration. The predictions are exactly the opposite for bunching. We test the theory using linked VAT and corporation tax records from 2004-2014, finding empirical support for these predictions. |
| spellingShingle | Liu, L Lockwood, B Almunia, M Tam, H VAT notches, voluntary registration, and bunching: Theory and UK evidence |
| title | VAT notches, voluntary registration, and bunching: Theory and UK evidence |
| title_full | VAT notches, voluntary registration, and bunching: Theory and UK evidence |
| title_fullStr | VAT notches, voluntary registration, and bunching: Theory and UK evidence |
| title_full_unstemmed | VAT notches, voluntary registration, and bunching: Theory and UK evidence |
| title_short | VAT notches, voluntary registration, and bunching: Theory and UK evidence |
| title_sort | vat notches voluntary registration and bunching theory and uk evidence |
| work_keys_str_mv | AT liul vatnotchesvoluntaryregistrationandbunchingtheoryandukevidence AT lockwoodb vatnotchesvoluntaryregistrationandbunchingtheoryandukevidence AT almuniam vatnotchesvoluntaryregistrationandbunchingtheoryandukevidence AT tamh vatnotchesvoluntaryregistrationandbunchingtheoryandukevidence |