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Firms currently only have to charge VAT if their turnover is £85,000 or more a year, the highest threshold in the EU.

A government report last year calculated that halving the threshold to £43,000 would raise £1.5bn for the Treasury.

The move would be a blow to small art and antiques firms already facing mandatory digital reporting for VAT starting from April 1, 2019.

One dealer wrote to ATG: “The proposal will have far-reaching effects as a great many antiques dealers manage to run effective businesses below the current VAT entry level.”

BADA, which does not require members to be VAT registered, said such a move would particularly hit those dealers starting out in the trade.

“Government should be working to make sure that business can be as competitive as possible and adding significant extra cost and red tape will not help encourage anyone to start a new art or antiques business,” said Marco Forgione, chief executive of BADA.