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No impact from VAT cut

March 11, 2009 by admin  
Filed under News, News-Banking

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Last year saw the government introduce a number of different measures to try and ease the effects of the financial and economic crisis on consumers, and one of the measures that was introduced was a cut in VAT, which was cut from 17.5 percent to 15 percent before Christmas.
The government hoped that the VAT cut would encourage people to start spending again, which would help to boost the economy and minimise the effects of the recession.

However, according to the Federation of Small Businesses the 2.5 percent VAT cut has had no impact, with around 97 percent of member businesses stating that the VAT cut had not had any positive effect on business. Government officials have said that it could still take time for the effects of the VAT cut to feed through to business, but the FSB is more interested in the government taking access to increase access to funds for small businesses.

The FSB said that only 8 percent of members had said that their banks had made funds more readily available as a result of recent government measures, and officials from the Federation said that the measures that were being put into place by the government were largely not working.

Over 50 percent of members said that they did not think that lenders would increase access to funds for small businesses in response to government measures.

One FSB official said: “These startling figures show there is still more to be done by the government and the banks to ensure businesses can survive the economic climate. The government must use its meetings with the banks to monitor the guarantee scheme and assess why loans are being refused.”

Tags: put, vat cut, minimise, crisis, Small business, government, christmas, Federation of Small Businesses

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