UK SMEs believe a cut in VAT would have substantial benefit to their business and the economy at large, new research reveals.
The survey, commissioned by Sage, found that more than three quarters of small and medium firms think the sales tax is too high at its current level of 20 per cent.
Two fifths surveyed said that a cut in VAT would help them grow and improve long term prospects, and ten per cent said it could help them retain staff.
One in three firms said they wanted to see the rate return to its pre-2011 level of 17.5 per cent, but more than half said it should be cut by five per cent or more.
Lee Perkins, managing irector for Sage Start-up and Small Business UKI, said: ?For many businesses VAT remains an Achilles” heel. The nuances around reclaiming VAT mean business owners suspect they are not getting all the money they are entitled to, and this is something we ve been focusing on helping our customers to address.
Although a reduction in VAT would certainly help businesses, the fact that we are now starting to see tangible growth at the same time as tackling deficit means that it’s not something we are likely to see in the near future. Therefore the focus has got to be on making sure your business is making the most of the current VAT set-up.