With the rise in VAT looming large at the start of next year, a report by the Federation of Small Businesses (FSB) suggests that around 35,000 new jobs could be created if the VAT threshold for small businesses were increased by £20,000.
The report shows that if the VAT threshold was increased to £90,000 then businesses would stand to save £162 million per year as they would avoid complying with costly VAT red tape. This is on top of the £700 million saving in general VAT payments incurred by increasing the gap.
Simon Hanson from the FSB said that the rise in VAT is a big issue for small businesses in the North East. “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.” The extra money generated would create up to 35,000 jobs on an average wage, the FSB said.
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(main article sourced from bdaily website, 9 December 2010)