Small businesses call for VAT change
SMALL businesses could create up 35,000 extra jobs if the VAT threshold was increased, according to new research.
A report by the Centre for Economics and Business Research for the Federation of Small Businesses shows that increasing the VAT threshold for small businesses from £70,000 to £90,000 would save £162m in bureacratic costs and £700m in payments.
It argues that the loss to the Treasury would be offest by the revenue from jobs created and the anticipated £13bn in receipts that will be generated when VAT rises to 20% in the New Year.
FSB chairman John Walker said:“The smaller the business, the higher the cost of VAT compliance; this is why the FSB is calling for the Government to increase the threshold at which a business must register for VAT.
“If the Government is truly committed to a private sector led recovery, then it must implement a small business programme for growth to allow small firms to grow and invest – and this would be a great start.
“The potential loss to Government in VAT receipts by increasing the threshold to £90,000 would be more than outweighed by the VAT rise due to come into force in January and would help to put £900 million back into small firms with the potential to create up to 35,000 jobs.”
