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Taxation cut could prove costly, says retailer

Date: 1st December 2008

The reduction in the rate of VAT could prove costly for business start-ups, according to one retailer.

From today (December 1st), the official rate of VAT will be cut to 15 per cent from 17.5 per cent, following chancellor Alistair Darling's pre-budget report last week.

While the move was designed to encourage consumer spending over the festive season, one shop owner believes that the deduction will prove more trouble than it's worth.

Lindsey Adam, owner of Bonkers toy shop in Fife, Scotland, said: "The administrative burden attached is massive.

"I will be passing the rate cut onto customers for some products but not all."

She added that if Mr Darling had reduced the rate of VAT to ten per cent, it may have encouraged customers to spend, but 2.5 per cent will do very little.

Business start-ups looking for advice on the VAT reduction may do well to visit an accountant, who could also provide invaluable help on filing a self-assessment tax return.



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