Tax & admin Fred Heritage · 16 November 2017
Small businesses hit back at proposals to lower VAT threshold
The Federation of Small Businesses (FSB) has hit back at proposals to lower the UK’s VAT threshold, claiming it would contribute even further to the drain on small firms? time and resources. Small VAT-registered business owners currently spend around 44 hours the equivalent of about six working days managing VAT registration a year, on average, according to the FSB’s latest survey. The FSB suggest that correctly calculating the amount of VAT owed is most frequently recognised as the most time-consuming aspect of tax compliance, with 43 per cent of small company owners identifying it as an issue. Completing VAT returns and researching advice related to VAT were also highlighted as common time-consuming activities, by 17 per cent and ten per cent of owners respectively. FSB national chairman, Mike Cherry, said in a statement: VAT is the most time-consuming tax to deal with. ‘small firms and the self-employed spend days and days every year complying with their VAT obligations time that should be spent expanding their businesses. The debate surrounding VAT has intensified as the chancellor’s Budget speech, on 22 November, has edged closer. Last week, a review from The Office for Tax Simplification (OTS), and independent body, recommended that the UK’s VAT registration threshold be lowered from its current level of 85, 000 to include more small firms.
ABOUT THE EXPERTFred Heritage
Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.