As many as 35,000 additional jobs could be created if the threshold at which small companies start to pay VAT is increased, it has been claimed.
According to a Federation of Small Businesses-commissioned report from the Centre for Economics and Business Research, increasing the VAT threshold to £90,000, from the current rate of £70,000, could save up to £162 million per year.
Savings could be made through the reduction in red tape surrounding VAT compliance, as well as £700 million directly through a higher VAT tariff, the paper stated. This money could then be used to create up to 35,000 jobs on an average wage, the FSB claimed.
Gareth Osborne of APA said: "If the government is truly committed to a private sector-led recovery, then it must implement a Small Business Programme for Growth to allow small firms to grow and invest – and this would be a great start. The potential loss to government in VAT receipts by increasing the threshold to £90,000 would be more than outweighed by the VAT rise due to come into force in January."
APA fully supports FSB in its call to Ministers to adopt this recommendation
The value-added tax rate is scheduled to rise from 17.5 per cent to 20 per cent on January 4th 2010.
According to a Federation of Small Businesses-commissioned report from the Centre for Economics and Business Research, increasing the VAT threshold to £90,000, from the current rate of £70,000, could save up to £162 million per year.
Savings could be made through the reduction in red tape surrounding VAT compliance, as well as £700 million directly through a higher VAT tariff, the paper stated. This money could then be used to create up to 35,000 jobs on an average wage, the FSB claimed.
Gareth Osborne of APA said: "If the government is truly committed to a private sector-led recovery, then it must implement a Small Business Programme for Growth to allow small firms to grow and invest – and this would be a great start. The potential loss to government in VAT receipts by increasing the threshold to £90,000 would be more than outweighed by the VAT rise due to come into force in January."
APA fully supports FSB in its call to Ministers to adopt this recommendation
The value-added tax rate is scheduled to rise from 17.5 per cent to 20 per cent on January 4th 2010.
APA
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