Small flyer printers may be disproportionately affected by VAT hike

Smaller businesses are less likely to be able to absorb the increase in VAT, it has been claimed.

Small companies are likely to be impacted more than large organisations by the recent increase in VAT.

That is according to a spokesman for the Forum of Private Business (FBP), who explained that the former's margins are much tighter than bigger firms so it is improbable they will be able to absorb the increase and maintain prices.

The FBP believes the government should do more to help emergent businesses cope with the VAT rise, he continued, noting the state has expressed its desire for such organisations to spearhead the economic recovery but it needs to take action if it is serious about that.

"As well as helping with the VAT, we would argue for [a] wholesale review of all legal legislation that affects small businesses," the spokesman said.

His comments come after research carried out by the Federation of Small Businesses found more than 70 per cent of small companies expect the VAT hike to have a negative impact on their firm.

Published: 7th January 2011

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