West Cornwall MP Derek Thomas is urging the Treasury to raise the VAT threshold by almost 50% in a bid to help small businesses in his constituency.
To coincide with Small Business Saturday which takes place on December 3rd, Mr Thomas has requested a meeting with the Chief Secretary to the Treasury, David Gauke MP, to discuss raising the current VAT threshold of £83,000.
Mr Thomas said that many small businesses are under increasing financial pressure and that lifting the threshold to £120,000 would have a big impact.
“It’s clear that there is an economic vacuum created during off-season periods in areas which are heavily dependent on tourism such as in West Cornwall and the Isles of Scilly,” he said.
“Small businesses often reduce their economic activity in order to remain within the current threshold which not only compresses the tourist season into a few short months but also has a negative impact on employment opportunities for workers and reduces the tax the Government can collect through PAYE.
“Raising the tax threshold will create an incentive for tourism small businesses to open for longer periods each year, put more money into the local economy and invigorate rural high streets.”
Mr Thomas will make the case to the Treasury that the introduction of auto-enrolment work-based pensions, business rate re-evaluations and the introduction of the National Living Wage are all making it particularly tough for small businesses to make ends meet.
Derek has requested from the House of Commons Library the costs to the Treasury of increasing the tax threshold to £120,000 and argues that the threshold must be raised in light of these other costs levied against small businesses even if the change in threshold is targeted at deprived areas or areas where the tourism is a significant factor such as West Cornwall and the Isles of Scilly.
Now entering its fourth year, Small Business Saturday is the UK’s most successful small business campaign – last year more than £623 million was spent on the day in small independent businesses.
Mr Thomas will be in Helston on Saturday visiting independent retailers and browsing the stalls at Helston Farmers’ Market at the Old Cattle Market, next to the Boating Lake in Helston.
Established in 2008 and starting with 13 local producers, the market has grown to be the largest of its kind in Cornwall with more than 40 producers selling high quality local produce.