Is Philip Hammond trying to destroy the small business sector?

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  20th Nov 2017 - 14:40 20th Nov 2017
Mark Hewitt
Trueman Brown

Is Philip Hammond trying to destroy the small business sector?

If the rumours are true - VAT Registration Threshold to be reduced from £85,000 to £25,000 - then this could be the final straw that breaks the back of the small business sector.

After dumping more red tape on business in the form of RTI, auto enrolment with GDPR to come, increasing taxes with the dividend allowance and changes to the VAT flat rate scheme, this change, if correct, could send the UK into a recession very quickly.

Of course, it will be blamed on BREXIT not the stupidity of this Government.

 

  20th Nov 2017 - 14:46 20th Nov 2017
Paul OrangeTree
OrangeTree Online
Quote: Mark Hewitt (Trueman Brown)

If the rumours are true - VAT Registration Threshold to be reduced from £85,000 to £25,000 - then this could be the final straw that breaks the back of the small business sector.

After dumping more red tape on business in the form of RTI, auto enrolment with GDPR to come, increasing taxes with the dividend allowance and changes to the VAT flat rate scheme, this change, if correct, could send the UK into a recession very quickly.

Of course, it will be blamed on BREXIT not the stupidity of this Government.

 

 

There are a number of factors here, I suspect.

1.  Hammond is, to say the least, one of the oddest of recent Chancellors, seeming to be out of tune with his party.
2.  The Government are desperate.  At the moment they need to raise more tax.  They see the micro business sector as a source of revenue , and believe there will be only modest resistence.  And that sector cannot pick up the phone to Price Waterhouse and pay £50k a nano second to reduce their tax bill.
3.  It may  be that this is a fishing leak, and that the reality is not quite this.

Nonetheless, although I think the VAT threshold could be lowered, this is too far too fast. 

As all my businesses are VAT registered, it will make no difference to me.  But I would favour more modest touches to this area of taxation!

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