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07 November 2017

Small firms voice support for VAT simplification

Responding to the publication of the Office of Tax Simplification (OTS)’s ‘Value Added Tax (VAT): Routes to Simplification’ report, Mike Cherry, Federation of Small Businesses (FSB) National Chairman, said:

This fundamental review of our vastly complex VAT system is long overdue.

“Any reduction of the VAT threshold against the current backdrop of unprecedented uncertainty and spiralling costs will have a hugely negative impact on growth within the small business community.   

“The OTS is right to address the issue of ‘thresholditis’. It’s equally right to suggest that a smoothing mechanism which doesn’t force any more small firms into the VAT system could encourage more businesses to grow beyond the £85,000 cliff edge.

“Small business owners spend a huge number of hours a year complying with their VAT obligations – hours that should be spent running their firms. We welcome the report’s flagging of “extraordinary anomalies” within the system and its drive towards improving VAT guidance and reducing the massive admin burdens associated with the tax.

“We wholeheartedly agree with the suggestion that Brexit marks an opportunity to reform this painfully onerous tax over the long term.”