Some small businesses could be worse off as a result of a temporary cut in VAT which comes into force on Monday.
Firms which take advantage of the government's flat-rate VAT scheme will now keep a lower proportion of the VAT they collect from customers.
The change contradicts an explicit assurance in this week's pre-Budget report which said they would benefit.
HM Revenue & Customs said that firms would benefit from paying a lower VAT rate on their expenses.
Flat rates had been changed to avoid giving the firms too much of a tax advantage, HMRC said.
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Firms which take advantage of the government's flat-rate VAT scheme will now keep a lower proportion of the VAT they collect from customers.
The change contradicts an explicit assurance in this week's pre-Budget report which said they would benefit.
HM Revenue & Customs said that firms would benefit from paying a lower VAT rate on their expenses.
Flat rates had been changed to avoid giving the firms too much of a tax advantage, HMRC said.
full story
