Jump to MenuJump to Main ContentJump to the SidebarJump to About A&T Business AssociatesJump to How A&T Business Associates are DifferentJump to How A&T Business Associates WorkJump to Our LinksJump to our Industry NewsJump to Legal InformationJump to Viewing OptionsJump to SearchJump to Site MapJump to Contact Page

SMEs can take cheer from VAT and bank regulatory reform

While Europe’s leaders battle over changes to national financial legislation and the future of the Eurozone, SMEs can take heart from recent regulatory reform in the UK as the spotlight falls on the need to improve conditions for small businesses and, in particular, SME lending.
While debate rages over the validity of his proposed scheme, the fact that the new executive director of the Bank of England, Andrew Haldane, has acknowledged that small business lending needs to improve should be welcomed by the SME sector. He has proposed that rules governing how banks calculate risk weightings should be relaxed, facilitating greater SME lending.
He hopes that such a move would end the standoff between the big banks and small businesses over SME credit. The banks claim that SME lending is falling as demand is dropping, while SMEs claim that prohibitive bank lending terms are behind the decline and are encouraging them to seek alternative funding, such as invoice discounting and factoring.
Another piece of regulatory news that has been welcomed by small businesses is the government’s decision to close the Channel Islands VAT loophole. The SME sector had long been campaigning for a change to this legislation on the grounds that the advantage enjoyed by Channel Island companies had driven many traders in CDs, DVDs and books based on the UK mainland out of business.
The change in legislation, which comes into force from 1 April 2012, has wiped millions of pounds off the value of Channel Island companies, such as Play.com. Despite sales of over £280 million in 2005, the business was sold in September 2011, in anticipation of the reform, for just £25 million. The SME sector hopes a more level playing field will help stimulate economic growth.
To find out more about A&T Business Associates services, contact us on 01903 602211 or info@atbusinessassociates.co.uk

Return to the News Page