THE owner of a Tyne Valley B&B has called on the government to increase the VAT registration threshold.

Businesses currently have to register for and charge VAT if their annual revenues are £85,000 or more, a threshold that Ian Dommett, who runs the five-bed B&B The Old School House in Haltwhistle with his wife, says is "stifling business growth".

"Most B&B's in the Tyne Valley I think are experiencing a very good summer, and had a very good summer last year," said Mr Dommett.

"But our energy costs for gas and electricity have gone up nearly 400 per cent. In January last year we were paying £237 a month, we're now paying £760 a month.

"Every single item of food we buy has gone up by at least 20, maybe 30 per cent in that time.

"So all of our costs have gone up, which means we've increased our prices. But the problem is by increasing our prices, we are moving very close to the VAT threshold.

"That means we're going to have to shut so we don't go over the VAT threshold, or start charging 20 per cent more to every guest but to have no benefit to ourselves.

"B&Bs are making the decision that we can't turn business down in May, June, July, August - the peak months - so that probably means we will reach a point in October where we're having to close and we could close for several months."

Mr Dommett, who is also the chair of the Haltwhistle Chamber of Trade, added this then has a knock-on effect on the local economy.

"When we have guests in our B&B, each of those guests needs to get an evening meal, and they need to get sandwiches etc for lunch, so they are spending money in the pubs, restaurants and shops in the town," he said.

"Every day that we are shut, that means up to nine people don't take an evening meal in one of the pubs of Haltwhistle."

The VAT registration threshold historically increased every year in the Budget, broadly in line with inflation, but has remained stagnant at £85,000 since April 1, 2017 and is due to remain at that level until the end of March 2026.

"If they [the government] raised it to say £120,000, that would transform the economy of the Tyne Valley overnight," said Mr Dommett. "Particularly in those times of the year when it's quiet anyway as we'd be able to promote coming in October through to March."

An HM Treasury spokesman said: "The UK has a higher VAT registration threshold than any EU member state and the second highest in the OECD, which keeps most businesses out of VAT altogether."