Bristol, United Kingdom (PressExposure) April 22, 2009 -- Two of the UK's biggest online communities of entrepreneurs are supporting a campaign for the government to increase the VAT threshold to Â£100,000 as one way of helping small business owners cope with the economic downturn.
BusinessZone.co.uk and UK Business Forums, home to over 50,000 registered members, are backing a petition set up by chartered accountant Elaine Clark at calling on the government to raise the minimum turnover limit after which business owners must register for VAT from Â£67,000 to Â£100,000.
The simple measure would bring benefits to many entrepreneurs struggling to deal with the impact of the recession.
Dan Martin, editor of BusinessZone.co.uk, said: "One way of the government demonstrating that it really understands the needs of small business owners during the current economic climate would be to raise the VAT threshold.
"While very simple to implement, the measure would reduce the administrative burden on business owners and help them to remain competitive. The benefits of a non-VAT inclusive price could also be passed onto consumers.
"With employers' groups warning that thousands of SMEs will go bust as a result of the crunch, it is vital that Alistair Darling's Budget is small business friendly. Adding a VAT threshold increase to the list of measures to be announced next Wednesday would go a long way to doing that."
Elaine Clark, of Cheapaccounting.co.uk, added: "I have a client who is approaching the VAT registration threshold. They cannot increase their prices to cover the VAT to be paid to HMRC as there is a large competitor in the vicinity and the price competition is tough so they will have to absorb the VAT into their profit.
"It will probably mean the closure of their business and the loss of their livelihood. This is something which I think should be avoided.
"By implementing the change to the VAT threshold, my client has a chance of keeping their business afloat during the recession and in my view this is something which should be fully supported by the government."