VAT cut not helpful, say SMEs

The vast majority of SMEs believe the Chancellor’s VAT cut was a bad idea, according to a survey conducted by Access Accounting.

The vast majority of SMEs believe the Chancellor’s VAT cut was a bad idea, according to a survey conducted by Access Accounting.    

Some 82 per cent of SMEs surveyed believe the 2.5 per cent reduction introduced almost three months ago was a bad idea, with 98 per cent reporting that it hasn’t resulted in any material change to their business.

Kevin Misselbrook, customer services director of Access Accounting, says, ‘Cutting the rate of VAT has clearly done nothing to stimulate business or the economy. More could be done to help without putting greater time and cost pressures on small businesses.’  

When asked what other steps the chancellor could take to help SMEs, 21 per cent of respondents suggested the government should force banks to pass on rate changes to business overdrafts and loans, while 19 per cent said they want to see a decrease in corporation tax.

Of the 102 SMEs surveyed 42 per cent said the VAT change took half a day to implement.

Nick Britton

Nick was the Managing Editor for growthbusiness.co.uk when it was owned by Vitesse Media, before moving on to become Head of Investment Group and Editor at What Investment and thence to Head of Intermediary... More by Nick Britton