'Stealth tax' discovered by FSB (From Watford Observer)

'Stealth tax' discovered by FSB

8:30am Friday 5th March 2010 in

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The FSB has discovered that 48 per cent of business sectors have seen a rise in the level of flat rate VAT they pay.

The Federation of Small Businesses (FSB) has discovered that the flat rate VAT charged by HMRC to the smallest of businesses has risen to a higher level. The FSB has urged the Government to review the issue in its Budget submission to the Chancellor this week.

Flat rate VAT is charged to the smallest businesses with a turnover of less than £150,000 and aims to minimise the red tape around VAT, providing a slightly lower rate which varies dependent on the sector the business operates in.

FSB analysis of the rates has found that businesses operating within the agricultural services sector and have seen rates increase by a huge 2.5 per cent. For grocers, newsagents, tobacconists, clothing shops and membership organisations rates have risen by 1.5 per cent as have those for businesses involved in social work.

At the other end of the scale, estate agency and property management services will see their rate decrease by 0.5 per cent and computer repair services by 1.5 per cent.

In its Budget submission, sent to the Treasury this week, the FSB has called for the flat rate VAT to be immediately reviewed.