The independent Migration Advisory Committee came up with the earnings threshold when asked by the government to calculate the minimum needed to avoid recourse to public funds.

ECONOMIST: Bit by bit, Britain is closing its borders to immigrants

It mitigates the impact of the rate hike by raising the threshold of earnings to which it applies.

ECONOMIST: A constituency that could make a difference

Confusingly, the annual tax return does not supersede an existing monthly requirement to report and pay tax on non-taxed income if total earnings exceed a certain threshold.

ECONOMIST: China's tax system: Return to sender | The

In some cases, state regulators can restrict banks from paying dividends if their accumulated earnings do not meet a certain threshold.

FORBES: Zombie Banks Continue to Suck Taxpayer Cash

As her turnover was just over the VAT threshold, she said was now seriously thinking of cutting back on her earnings.

BBC: Retailers prepare for the VAT cut