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VAT
Your point on VAT is interesting though but it is a very complex area. Small business (or even medium business) in UK are hit by:
(a) For virtual services, we are 17.5% less competitive compared to US, Russia, Asian etc firm. It is true that when these companies sell online services etc to UK residence, they have to add VAT, but as to how we can apply our law to a Russian website is another question. This will become more interesting in the wired world when, say even accountancy (tax return) services is provided to UK residence by a Indian entity.
(b) I heard of a small business with turnover just over the threshold and know that if they account for VAT, they will be nothing leave to eat or for the fact, the business will not exist..
But we cannot blame the government for VAT, blame the EU for that...
CT Threshold
It may also be useful to raise the small companies CT treshold. This has remained the same for many years. It should at the very least be raised in line with inflation, but should really be earnings.