VAT cut has firms 'wading through bureaucracy'

Date: 1st December 2008

Business start-ups will be saddled with an unnecessary administrative burden due to the recent changes in VAT.

That's according to the Forum of Private Business (FPB), which believes that the recent 2.5 per cut in VAT could not have come at a worse time of the year for retailers.

The group also expressed concerns over its ability to encourage increased consumer spend, condemning the reduction as "pointless" and "ill-thought out".

Nick Palin, director of finance for the FSB, commented: "At this crucial time of the year, small firms should not be forced to occupy themselves with the level of administration that this change will entail.

"All it does is increase the amount of time smaller retailers have to spend wading through bureaucracy."

The change takes effect today (December 1st), following chancellor Alistair Darling's pre-budget announcement last week, which revealed that VAT would be set at a rate of 15 per cent on a 13-month basis.