January 4, 2011

Small businesses worst hit by VAT hike

by Jan Harris

The Federation of Small Businesses (FSB) has warned that over 70 per cent of SMEs expect to be adversely affected by today’s increase in VAT to 20 per cent.

Small businesses are believed to be less able to absorb the VAT increase than larger firms, meaning that the cost increase will have to be passed on to customers.

The FSB’s survey found that 52% of its members expect to have to increase prices by more than the increase in VAT, while nearly half (45 per cent) expect it to lead to a fall in turnover.

The VAT increase is expected to generate more than £12 billion a year towards the Government’s efforts to reduce the UK’s public deficit.

The FSB is calling for the Government to increase the threshold at which companies have to register for VAT from £70,000 to £90,000.

It also wants the VAT rise to be reviewed once the deficit is cut.

Discuss this in the Internet Business forums

Story link: Small businesses worst hit by VAT hike

 

Leave a Reply




 

Previous: «
Next: »

Visited 1786 times, 1 so far today

Tags: ,

Posted in: All News,Business