Small firms to be hit by VAT rise

Date: 2nd December 2010

Small businesses across the UK could be among those interested in the recent comments of one expert regarding VAT.

The government is set to increase the rate of VAT from 17.5 per cent to 20 per cent from January 4th 2011.

Dr John Philpot, of the Chartered Institute of Personnel and Development, has claimed that smaller enterprises will be the ones to be significantly affected by the move.

In a recent interview on the Today Programme on BBC Radio 4, the expert commented: "I suspect it will be smaller-sized retailers ... who will actually feel the full brunt of this.

"And it's that part of the community which of course, both in terms of regulatory reform and also in terms of job creation, that the government is banking a lot of its hopes on over the next few years."

Last month, the CIPD forecast that the VAT rise, along with public sector spending cuts, will see almost 1.6 million jobs lost across the UK economy by 2015-16.

Posted by Emily Smith