Advisers call for VAT reduction

Date: 14th November 2008

A reduction in the rate of VAT would help small businesses and kick-start the economy, according to the Chartered Institute of Taxation (CIOT).

The institute has made the claim in the run-up to chancellor Alistair Darling's pre-budget speech, which will be help on November 24th.

While vocal in its calls for a VAT reduction, the CIOT has warned the government that it must consider any cut in taxation very carefully.

Deputy president of the CIOT, Andrew Hubbard, said: "Although there may be a need for short term fiscal measures, the government needs to ensure that any changes make sense in the medium term.

"A reduction of VAT would help those on low incomes as well as small and large businesses."

He added that the cut would be quite simple to implement and could also be limited by time.

The CIOT is the UK's largest professional body to be solely concerned with taxation.