FSB calls for openness on flat rate VAT

by Jan Harris

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Small business champion, the Federation of Small Businesses (FSB), is calling on the government to review flat rate VAT after discovering huge rises in the rates that small businesses have to pay.

An FSB survey found that flat rate VAT, which HMRC charges businesses with a turnover of less than £150,000, has risen for 48% of business sectors.

The highest increase is for the agricultural services sector, which now has to pay 2.5% more, while grocers, newsagents, tobacconists, clothing shops and membership organisations have suffered a 1.5% increase.

John Wright, National Chairman of the Federation of Small Businesses, said:

“While a few sectors have seen a decrease, the majority of businesses will see their rates rise, which is unacceptable at a time when cash-flow is limited. The FSB believes that this is a stealth tax, which will affect a firms overall profitability, deliberately directed at small businesses during the recession.”

The FSB also highlighted the problems that complex tax rules cause for small businesses, sometimes to the extent that this can prevent them taking on more staff.

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Story link: FSB calls for openness on flat rate VAT

Tags: Federation of Small Businesses, flat rate VAT

Posted in: All News,Business