The Government’s cut in VAT to 15% has come under attack from business representative groups and academics at the Treasury Select Committee.
Leaders from the business community condemned the measures as too little or too late to help struggling businesses.
Various organisations challenged the December 1, 2008 VAT rate cut from 17.5% to 15%.
Business representative groups and academics said the rate cut was too small.
SME advisers also said that the Government’s announcement that it would allow an extension of the time period in which businesses can offset taxable losses was unlikely to produce any significant gains for small businesses.
In November’s Pre-Budget Report, the Chancellor announced that the carry-back for losses would be extended to three years as opposed to the existing one year. But these losses would be capped at £50,000 – a fact that was not mentioned in the Pre-Budget Report speech.
Equally, the process for submitting claims was too slow and cumbersome, said spokespeople for the professional bodies.