Pictured above: Nigel Reynolds
Birmingham accountancy firm, Reynolds and Co reassures there is
a silver lining for business start-ups and micro businesses
concerned about the effects of the proposed 20% VAT increase in the
West Midlands.
The family owned practice claims non VAT registered business
start-ups and micro businesses could gain a competitive edge and
leave their competition behind when the 20% VAT increase comes into
effect from January 2011.
"Business start-ups and micro businesses in the region could use
the impending VAT increase to their advantage, as they continue to
operate and survive in a challenging economic climate. The VAT
increase could open up a silver lining for service based business
start-ups and micro businesses who do not have much by way of
vatable costs.
"These types of businesses need to think outside the box and
consider their competition who will be VAT registered and will
either be forced to put their prices up, or take a hit to their
profits.
"This opens up a window of opportunity for businesses under the
VAT registration threshold that will have the option to either
increase their prices to just below their competitors in a bid to
outshine their competition, or alternatively keep prices the same
and win new customers.
"Times are extremely tough. Businesses and entrepreneurs
starting out in the region need to think smart and start planning
their strategies now to succeed and move their businesses forward
in 2011," added Nigel Reynolds, Founder and Principal of Reynolds
and Co.
The current HM Revenue and Customs (HMRC) VAT registration
threshold is £70,000 in the UK.
"We hope the HMRC will increase the VAT registration threshold
from April 2011. This would encourage more business start-ups and
take the pressure off entrepreneurs starting out in the world of
business," added Mr Reynolds.
Chancellor of the Exchequer George Osborne increased the rate of
VAT in his first Budget to MPs. Osborne announced the standard rate
of VAT, which is currently 17.5% will increase to 20% on 4th
January 2011.
Reynolds and Co specialise in accountancy (including Solicitors'
Accounts Rules), taxation and business advisory services. This
includes Management and Business Services, Business Start Up
Support, Tax Management and Tax Returns Support, IT Support and
Payroll and Booking Keeping Services.
The firm is also a member of the ACCA, the largest global body
for professional accountants - with 140,000 members of the
accredited body across the World.