VAT changes could be a 'massive problem' for smaller firms

Date: 16th August 2010

Smaller firms may need tax advice to help cope with the upcoming rise in VAT, it has been suggested.

Former Apprentice winner Tim Campbell, founder of the Bright Ideas Trust, which provides business support to young people, has said that small businesses could struggle when a rise in VAT comes into affect in January next year.

"I think, longer term, small businesses are going to face massive problems around the VAT increase that's coming because most small companies are going to have to change their pricing structures, which will make them less competitive," he said.

Taking advantage of advice on tax planning could help such firms deal with the VAT changes.

Mr Campbell added: "You can't teach entrepreneurialism, this is a mindset, but you can teach small business owners how to plan successfully, where they can get the support they need, and best practice on running and growing a business."

VAT is set to increase from 17.5 per cent to 20 per cent as of January 4th, 2011.

Posted by Jacob Williams