Too much VAT is being paid, says FSB

Small businesses are paying a higher flat rate than they should have to, it has been claimed.

The Federation of Small Businesses (FSB) noted that the agricultural services sector is paying 2.5 per cent extra, while newsagents, grocers and tobacconists are having to part with an additional 1.5 per cent.

John Wright, national chairman of the FSB, stated that organisations are still getting charged above the pre-decrease levels despite the fact that VAT has been restored to its original value.

It is an unacceptable situation because cash flow is so limited, he added, with the majority of businesses seeing their rates rise.

And Mr Wright observed that firms do not need ambiguity in how the figures are calculated.

It was recently announced that small and medium-seized enterprises are to benefit from a £700 million easy-to-access loan from the European Investment Bank - with over 3,000 companies thought to be eligible for the scheme.

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