CIPR slams Budget VAT hike for Small Businesses and Independents

The public relations industry has reacted with dismay to reports in today’s Financial Times that the government is considering dropping the VAT threshold from £85,000 to £20,000 per year, in a move that would sweep up huge numbers of small businesses into reporting VAT for the first time, and hit Independent Practitioners.

The changing threshold would have consequences beyond the purely financial. Independent public affairs professionals whose income falls below the VAT threshold are currently exempt from registering with the Office of the Registrar of Consultant Lobbying (ORCL). This means that a drop in the VAT threshold will hit them twice over. Not only will they have to register for VAT, they will also have to register with the OCLR.

CIPR President, Jason MacKenzie Found. Chart.PR, FCIPR
A year ago we were promised a ‘punishment budget’, and it looks like this is it.

The government says it wants to create a tax environment that encourages small business, but this move would slam the brakes on many thousands of new entrepreneurs in public relations and other sectors.

A sharp reduction in the VAT threshold reverses many years of consistent, cross party policy in steadily raising it. The impact on small business, especially in startups, will be significant. We urge the government to abandon this course of action right away. 
CIPR President, Jason MacKenzie Found. Chart.PR, FCIPR
Notes to editors

Notes to editors

About the Chartered Institute of Public Relations (CIPR)Founded in 1948, the Chartered Institute of Public Relations (CIPR) is the Royal Chartered professional body for public relations practitioners in the UK and overseas. The CIPR is the largest membership organisation for PR practitioners outside of North America. By size of turnover and number of individually registered members, we are the leading representative body for the PR profession and industry in Europe.

The CIPR advances professionalism in public relations by making its members accountable to their employers and the public through a code of conduct and searchable public register, setting standards through training, qualifications, awards and the production of best practice and skills guidance, facilitating Continuing Professional Development (CPD), and awarding Chartered Public Relations Practitioner status (Chart.PR).