Coalition Government Increase in VAT - Euroffice SME News roundup

Hello I'm Bryony; welcome to the Euroffice small business weekly round-up, here are your top stories.

It's feared that the new coalition government are gearing up for an increase in VAT, which could hurt small businesses, experts warn.

Economist at the British Chambers of Commerce, Steve Hughes says, "Any tax increase will feed through into negative consequences...but if the alternative is higher National Insurance, which will increase the cost of employment, then this is preferable".

The news comes as a study reveals that 61 per cent of online firms would prefer a rise in National Insurance as opposed to a VAT increase.

This might make pumping money back into small businesses more difficult for owners, despite more than 6 in 10 SME's saying they intend to spend more on staff, training and technology; less than 4 in 10 were able to invest in these areas over the past year.

Despite worries over VAT business leaders have welcomed the new coalition government and its declaration that supporting the growth of small businesses should be a 'core priority'.

The conservative/Lib Dem coalition agrees that improving the availability of credit is vital and will include; 'consideration of a major loan guarantee scheme and the use of net lending targets'.

That's all from us for today; please join us again next time.

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