Plans for VAT reform would hurt small traders

SIR – I read that the Government is debating whether to reduce the threshold above which businesses pay VAT from £85,000 to around £20,000 (report, November 4).

This, I am sure, will be a large problem for many involved in small local businesses. Most of those I have spoken to avoid going over the limit because of the horrendous paperwork required. They will either have to employ someone to do the job for them, or reduce their current working time in order to fill in the paperwork – while worrying about the penalty for any small mistake.

Axminster, Devon

SIR – The imposition of a £20,000 threshold for VAT will not create jobs; it’s much more likely to close what small shops are left on the high street.

Often these shops are small, family-run businesses, with a turnover of £50,000-£60,000. Such a reform would mean finding an extra £10,000 on very small margins.

Alistair Bishop

Northwood, Middlesex

SIR – If the Chancellor wishes to rationalise the VAT system, he could start by abolishing the exemption for “new build” construction.

The idea that assembling raw materials into an increasingly rare commodity does not create value is absurd. The receipts are potentially enormous.

Michael Heaton

Warminster, Wiltshire