FSB calls for cut in VAT to 5% for certain sectors

Contractor accountants may be interested to learn that the Federation of Small Businesses is calling on the government to cut VAT for certain sectors in order to encourage growth.

John Walker, the FSB’s national chairman, said recently that the coalition needs to do more to encourage firms to hire more staff and expand their business so that the UK’s economic recovery can really get going.

Small business confidence has fallen dramatically over recent months and January’s increase in the rate of VAT hit the construction and tourism sectors badly. As well as suffering from a drop in trade, small businesses incurred expenses implementing the increase. Walker is urging the government to cut VAT for businesses in these sectors to 5% to boost consumer demand.

He claims that tangible measures such as this will help SMEs grow their business, which in turn grows the economy.

Meanwhile, the debate over the value of social media in the retail sector continues.

Professor Joshua Bamfield, from the Centre for Retail Research, said that not all small retail businesses will benefit from using social networking sites. However, the ones that could benefit should consider using more than one platform and Facebook probably comes out better than Twitter.

He feels that Twitter and Facebook are currently only used by the better smaller retailers and those who have a particular interest in social media marketing. He believes that Facebook could prove to be a more important branding tool than Twitter is.

Bamfield’s comments came after a study by Virgin Media Business revealed that the retail sector is not getting the best out of Twitter even though the platform has been around for nearly five years.

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