Small and micro businesses in our community are feeling the weight of the economic crisis. The dual impact of rising inflation and the cost-of-living crisis is putting a strain on their small operations, and it’s clear they need our support more than ever.
One of the most significant challenges many of our smaller businesses face is the VAT threshold, currently set at £85,000. In practical terms, this means that once a business hits this turnover, it must register for VAT, which brings with it a host of additional costs.
Understandably, this is causing a lot of worry for our business owners, many of whom are hesitant to expand their operations because of these potential costs.
The Federation of Small Businesses (FSB) has come up with a solution that I wholeheartedly support – they’re calling for an increase in the VAT threshold from £85,000 to £100,000. This isn’t just about numbers on a balance sheet. It’s about giving our local businesses the confidence to grow and continue to support our local economy.
Previous studies by the FSB indicate that 24% of small businesses perceive the VAT limit as an obstacle to expansion, as they try to prevent the abrupt expenses associated with exceeding this limit in an effort to maintain customer affordability. The predicament has become more acute due to the rising inflation and ongoing impacts of Brexit, making growth a costly endeavour for small businesses.
I’ve thrown my full weight behind this campaign, and I’ve written to the Minister for Small Business and the Chancellor urging them to do the same. This isn’t a complex issue – it’s a straightforward intervention that could make a world of difference to our small businesses.
These are not just any businesses – these businesses are operating out of homes, markets, and local shops, providing services that range from personal care to home assistance. They are the entrepreneurs who take that bold step to start their own businesses, providing the day to day services that keep our families and our communities on track.
They need our support, and they need it now.
If you’re a small business owner in Inverness, Nairn, Badenoch, and Strathspey, I want to hear from you. I want to know your concerns and how I can best represent you.
Let me know if you want to keep in touch: https://mailchi.mp/drewhendrymp/small-business