Responding to the introduction of new rules to encourage online marketplaces to tackle Value Added Tax (VAT) evasion today, Federation of Small Businesses (FSB) National Chairman Mike Cherry, said:
“No business, in any part of the world, should be gaining an unfair advantage in the UK by dodging tax.
“The new rules introduced today promise to help level the playing field for small UK firms trading online. For too long, those who do the right thing have been allowed to lose out to firms that evade VAT.
“Online marketplaces are vital to the success of thousands of small firms – often a natural complement to their high street shops. Like any good market organiser, these websites have a responsibility to ensure all traders are playing by the rules.
“Equally, they need to ensure that in complying with the new rules set out today they don’t place any unnecessary admin burdens on small firms.”
On the VAT threshold consultation announced by the Chancellor at his Spring Statement on Tuesday, Mike Cherry added:
“VAT is the most time-consuming tax for small firms to handle. A small VAT-registered firm spends more than a working week a year complying with the tax on average. That’s time that should be spent running their firms and increasing productivity.
“Suddenly dragging more small firms into the VAT regime is not the answer to the ‘thresholditis’ issue – where businesses close to the £85,000 turnover threshold for registration put the brakes on expansion. It’s good to see that the Chancellor’s two-year freeze on the threshold is still in place.
“We welcome the fact that the VAT review launched this week considers pro-business solutions to the challenge of small firms bunching before the threshold, such as phasing-in VAT obligations for small firms as they start to bring in more than £85,000.”
Notes to editor
About FSB
As experts in business, FSB offers members a wide range of vital business services, including advice, financial expertise, support and a powerful voice in Government. Its aim is to help smaller businesses achieve their ambitions. More information is available at www.fsb.org.uk. You can follow us on twitter @fsb_policy.
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About FSB
As the UK’s largest business support group, FSB is the voice of the UK’s small businesses and the self-employed. Established over 40 years ago to help its members succeed in business, FSB is a non-profit making and non-party political organisation that’s led by its members, for its members. As the UK’s leading business campaigner, FSB is focused on delivering change which supports smaller businesses to grow and succeed.
FSB offers members a wide range of vital business services, including access to finance, business banking, legal advice and support along with a powerful voice in Government. Each year FSB also runs the UK’s Celebrating Small Business Awards. More information is available at www.fsb.org.uk. You can follow us on twitter @fsb_policy and on Instagram @fsb_uk.