19/07/2011
The Federation of Small Businesses (FSB) has reiterated its claim that VAT cuts could be use to promote small business growth.
With confidence stalling amongst small business owners, the FSB has urged government to follow in the footsteps of numerous other European countries who have cut VAT on the tourism and construction sector.
As many countries slash VAT to five per cent over the course of a year to give a boost to its small businesses, the FSB has put forward a case that not only can the government afford the drop, it would in fact be beneficial in the long run.
In the absence of, or combined with VAT cuts, many businesses could use invoice finance as a way of freeing up cash to be able to fund any growth.
Smallbusiness.co.uk reports that FSB national chairman John Walker has made it clear that the way for the economy to grow is for small businesses to grow and expand. By taking on more staff, unemployment would fall and demand would be sated.
"Since the start of 2010, the FSB index has proved to be a good barometer of the path that economic growth will take, so the news that it has fallen back to almost zero paints a worrying picture for GDP," he explained.
Adding, Walker told fsb.org.uk: "We now need to government's actions to match its rhetoric, and it must finally deliver on actions in its growth strategy.
"We must see a cut in VAT to 5 per cent in the construction and tourism 
sectors to boost consumer demand. It is tangible measures like this that will actually help small businesses to be able to grow their business and grow the economy."
David Howells