ABPCO warns of VAT dangers to small agencies

The Association of British Professional Conference Organisers (ABPCO) has warned small firms will suffer under the coalition government's VAT increase.

ABPCO
ABPCO
ABPCO chair Rebecca Cadman-Jones said: "Professional conference organisers have already been hit by the recession, with buyers looking to squeeze budgets and reduce fees where possible yet expecting the same levels of service delivery.  With the new VAT increase, non-VAT-registered organisations such as charities and some public sector bodies will have to carry that additional cost. We will be urging our members to stand firm when it comes to fee cuts in order to avoid price wars that hurt everyone."

Chancellor George Osborne announced in his emergency Budget speech on Tuesday (22 June) that VAT will rise 2.5% to 20% from Januray 2011.

ABPCO said for firms or freelancers with a turnover of less than £61,000 who are not required to register for VAT, the increase could mean increased costs that they are unable to reclaim.

Cadman-Jones added: "Smaller agencies will struggle to manage increased costs if they are unable to reclaim VAT or not registered for the flat rate scheme offered by HMRC.  This could lead to further consolidation in the agency sector, with one-man operations forced to shut up shop and potentially look to consolidate with larger agencies."

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