Company Formation Owners Hit Back at VAT Increase


At the beginning of the recession, the government pledged to do all it could to help the small business sector and recent company formation owners. Many of the initiatives they implemented were defined by the media as ‘crowd-pleasers’ and ‘short-sighted’.

Across the nation the government was widely perceived as not having done enough. Therefore, when the pre-budget report was announced a couple of months ago, the SME sector waited with baited breath, to see if the government had gone further to help small business. They were understandably disappointed to find, that not only had the government not developed any new initiatives to help small businesses, they were actually planning to increase National Insurance and the VAT rate was going back up to17.5% in the New Year. We ask small business owners how they feel an increase in VAT will affect their companies.

Sam Matthews, founder of high street clothes store ‘Unified’ comments; “When the reduced VAT rate was announced, many felt that it was a case of too little too late. However, in my company it helped us a lot in terms of purchasing stock, now as the VAT rate is increased; it feels like the government is providing the small business sector with yet another challenge to overcome in the New Year.”

Alex Farber, director of ‘Discount Online’ comments: “The government just doesn’t listen to what small business owners need. We are at the front line of the recession, our feedback should be pivotal to the government’s recession exit strategy and yet we are disregarded. It will be interesting to see what sort of policies are presented by both government and the opposition as the election approaches.”