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Are the UK’s rules on VAT stifling entrepreneurship? That was precisely the suggestion that well-known Lochaber entrepreneur and Chamber of Commerce member Angus MacDonald made in last week’s Herald newspaper.
Scotland needs to build strong businesses to increase our tax income. Angus argued that as a country we need to increase our entrepreneurship and build bigger, more ambitious companies. As it stands, once a small business exceeds an annual income of £85,000, the business must register for and pay VAT on its whole income.
In the article, Angus argued that this an active disincentive for sole traders and small companies to expand, making them potentially more expensive than their competitors and increasing administrative work.
The extra business costs of administration involved in employing more staff may also be a barrier for growth as it may not be perceived to be financially worth the time and extra work.
The result is that many sole traders choose the stay as they are and keep their income below the threshold.
Once the company is bigger, and can support the extra administration, it becomes easier but there are real challenges to sole traders expanding their business.
Lochaber Chamber of Commerce plays an active role in assisting business development – providing access to resources, networking, business advice lines and more to help make it easier for businesses to grow.
We also have an important role in representing the business concerns of our members to those in power through our direct engagement with Scottish Government ministers and as part of the lobbying power of the Scottish Chambers of Commerce group.
What’s your view? Join the business debate and join Lochaber Chamber of Commerce to get your voice heard on the topics that matter to you.