UK firms 'need' reduced VAT
Hairdressers - 07/08/2006 17:18:57
Hairdressers and other labour intensive businesses should be allowed to benefit from reduced VAT rates like similar firms elsewhere in the EU.
That is according to the Forum of Private Business (FPB), which has called on the chancellor to allow UK firms to partake in a pilot scheme currently underway across Europe.
A total of 16 European states are allowing firms from their shores to benefit from not being charged the 15 per cent minimum VAT standard.
Ray Seymour, from the National Hairdressers Federation, said: "There is a high incidence of tax evasion by people who do not pay or charge VAT who are delivering home or personal services.
"Many companies in the hairdressing and beauty industries are cutting back on staff or not hiring workers in order to stay under the VAT threshold. On the continent, reducing VAT produced more jobs."
Business involved with the manufacturing of shoes, hairdressing, construction work, repair work, and renovations would have a significantly reduced tax burden if they were allowed to be involved with the scheme, according to the FPB.
Currently, only renovation and repair work on the Isle of Man will be subject to the new reduced rates.
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