In the penultimate of this five part series, Rutton Viccajee explains the headlines from the Autumn Statement 2016. This section focuses on the proposed changes to VAT. If you would like to know more about what the Chancellor has said (and Rutton’s analysis of why he said it), then read on…
VAT flat rate scheme
A new 16.5% rate will apply from 1 April 2017 for businesses with limited costs e.g. labour-only businesses.
Again, a tale of goodies and baddies. The government brought in the scheme to simplify compliance costs for small businesses.
When the small businesses who were labour-only made a killing on the profit, that was OK, they were goodies, because that was allowed.
Finally, they have caught up with this just a tiny bit. Such folks are now baddies, who must be curbed.
In the words of the Shrek donkey, ‘I am going to need some serious therapy when all this is over’.