Our website uses cookies to store information on your computer. You may delete and block all cookies from this site, but parts of the site will not work as a result. Find out more about how we use cookies.
(Do not show this message again)
Shout99 - News matters for freelancers
Search Shout99 - News matters for freelancers
(Advanced Search)
   Join Shout99  About Shout99   Sitemap   Contact Shout99 19th Dec 2018
Forgot your password?
Shout99 - Freelancers, FO35, Section 660
New Users Click Here
Shout99 - Freelancers, FO35, Section 660
Shout99 - Freelancers, FO35, Section 660
Front Page
News...
Freelancers' Shop...
Ask an Expert...
Letters
Direct Contracts
Press Links
Question Time
The Clubhouse
Conference Hall...
News from Partners
Accountants

Login
Sitemap

Business Links

Shout99 - Freelancers, FO35, Section 660

Freelancers' Shop

Personal Financial Services
from ContractorFinancials

Mortgages

Pensions

ISAs

Income protection

... and more special offers for Shout99 readers in the Freelancers' Shop

Shout99 - Freelancers, FO35, Section 660
  
Shout99 - Freelancers, FO35, Section 660

News for the
Construction Industry

Hardhatter.com - News for small businesses in the construction industry

Powered by
Powered by Novacaster
Advertisement
Cogent

Lowering VAT threshold would be burden on small firms
by Susie Hughes at 01:14 16/11/17 (News on Business)
Small businesses across the UK are spending a working week every year complying with their Value Added Tax (VAT) obligations, according to new research from the Federation of Small Businesses (FSB).
This follows concerns that the Chancellor is considering lowering the VAT threshold in the Autumn Budget. (See: Warning against VAT ‘cash grab’ on the self-employed - Shout99, Nov 2017)

The latest FSB survey shows that VAT-registered small business owners spend an average of 44 hours, the equivalent of six working days, managing VAT administration every year.

Correctly calculating the proportion of VAT owed is most frequently identified as the most time-consuming element of adherence, with four in ten firms flagging this as an issue. Filling out VAT returns and researching guidance are also commonly highlighted as time-consuming elements of the process.

Mike Cherry, FSB National Chairman, said: “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.

“Once again small firms and the self-employed fear the Chancellor could single them out for a tax grab at the Budget, this time by forcing more of them into the VAT regime. Doing so would create a real drag on business output.

“At a time of spiralling costs and persistent uncertainty, a lowering of the VAT threshold is the last thing our entrepreneurs need.”

Difficult
The new research finds that over a quarter of firms find VAT difficult to understand, compared to a fraction who describe it as very simple to grasp.

Advertisement
Common causes of this barrier to understanding are different exemptions (53 per cent), establishing the rate at which payment is required (24 per cent) and different thresholds (21 per cent).

Mike Cherry said: “The VAT regime is awash with complexity and anomalies. When the burden of administration falls so heavily on business owners and the self-employed, it opens the door to lost hours and honest mistakes. Small firms are not like corporations – they don’t have accounting expertise on tap.

“We have an issue with some firms approaching £85,000 of turnover and putting the brakes on. The sensible route to solving that issue lies in embracing the Office of Tax Simplification’s recommendation for a smoothing mechanism that respects the current threshold, not forcing more small firms into the system.

“A sudden drop in the VAT threshold would punish the smallest businesses and shift, rather than solve, the bunching issue. The registration cliff-edge remains a concern for many firms, but making huge swathes of businesses and the self-employed join the hugely complex VAT regime is not the answer. The Chancellor should be prioritising simplification, rather than expansion, of VAT and the tax system at large.”


--
If you wish to comment on this article, please log in and use the Reply button below. Registering is free and easy - see 'Join Shout99'.
-
Susie Hughes © Shout99 2017

Printer Version

Mail this to a friend

Copyright 1999-2018, Shout99.com | All Rights Reserved
Privacy Notice and Terms of Use
 

Advertisements
advert
advert
advert
advert