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The Government’s latest VAT cut has hit UK small business hard instead of helping it.

The British Chambers of Commerce says that the tax cut, which was supposed to aid spending and give small business some much needed income, has hindered millions of self employed people thanks to expensive costs.

The Government decided to reduce VAT to 15% from 17.5% after the pre-Budger report.

David Frost, director general of the BCC told the Parliament committee for business and enterprise: “Eighty percent of our members said the costs involved would outweigh the benefits.”

This has meant many small businesses have had to change pricing, literature, bills, invoices and a host of other costly extras, making the cut obsolete.

If you have lost out thanks to changes, and are now looking to make up the shortfall, there are always different financial options open to the small businessperson. Talk to an adviser and carefully go through your finances with them – you may be able to make up any losses with a loan, a remortgage or simply a moving of monies.

Right now nothing is more vital than planning for the year ahead. So weigh up your recent losses and profits and look forward to 2009. Planning now will help avoid financial difficulties in the future.

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