Chan­cel­lor should ex­tend VAT hol­i­day, say man­agers

The Daily Telegraph - Business - - Business - By

Rus­sell Lynch

MIN­IS­TERS should ex­tend a cash flow life­line to busi­nesses struck by Covid-19 by al­low­ing them to put off bil­lions in VAT pay­ments for longer, an ex­clu­sive poll has found.

Com­pa­nies have de­ferred a to­tal of £27.5bn in VAT pay­ments due to HMRC be­tween April and June un­til March next year to help stay afloat.

But the scheme ex­pired at the end of June and the Chan­cel­lor, Rishi Su­nak, de­clined to re­new it as part of the £30bn pack­age of mea­sures set out in last week’s sum­mer state­ment.

A sur­vey of 1,500 se­nior man­agers across pri­vate and pub­lic sec­tors by the Char­tered Man­age­ment In­sti­tute found that 57pc were in favour of ex­tend­ing the de­fer­ral, against 27pc who

‘Firms will re­quire flex­i­ble gov­ern­ment sup­port to weather this eco­nomic storm’

said it should fin­ish.

Mr Su­nak also con­firmed plans to close down the fur­lough scheme from the end of Oc­to­ber, in­stead opt­ing for more tar­geted mea­sures such as a VAT cut to help pro­tect 2m jobs in the leisure and hospitalit­y sec­tor.

Ann Francke, chief ex­ec­u­tive of the CMI, said: “Man­agers un­der­stand why hospitalit­y needs a VAT hol­i­day. But many other hard-hit sec­tors want to see some­thing sim­i­lar. Why not ex­tend this VAT hol­i­day to help them re­duce costs, stim­u­late de­mand and save jobs?”

Suren Thiru, head of eco­nomics at the Bri­tish Chambers of Com­merce, added: “Firms in many sec­tors are con­tin­u­ing to op­er­ate at re­duced ca­pac­ity and will re­quire flex­i­ble gov­ern­ment sup­port to weather this eco­nomic storm.”

The CMI sur­vey re­vealed that 35pc of man­agers ex­pect their or­gan­i­sa­tion to shed jobs by the end of the year, al­though 53pc agreed with the de­ci­sion to end the fur­lough scheme.

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.