You are here: News / VAT cut could prove costly for smaller retailers, says business lobby group
Thursday November 27th 2008
VAT cut could prove costly for smaller retailers, says business lobby group
Archived article dated Thursday November 27th 2008
The Government's 2.5% reduction in VAT has come under fire from smaller retailers, who believe that the cost of administering the change will vastly overshadow the benefits of the reduction.
The FPB is warning that the tax cut - designed to boost high street trade - could backfire because it is unlikely to convince many retailers to slash their prices.
"The reduction in VAT to 15% seems pointless, when, for example, a product that sells for £4.99 this week will retail for £4.89 next week after the VAT rate has been reduced," said Nick Palin, the FPB's Director of Finance. "This shows how ill thought-out this reduction has been. All it does is increase the amount of time smaller retailers have to spend wading through bureaucracy." He added: "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, but
Share this article:
Should your colleagues be reading the Retail Bulletin?
Let them know about us.
