City AM looks at concerns that increased costs and administrative requirements coming into force this month could push a swathe of businesses to the brink of collapse. Firms are now expected to pay all deferred VAT payments under a relief scheme set up to offset the impact of the pandemic, while hospitality businesses’ VAT bills will revert to pre-pandemic levels after a temporary 12.5% rate ended at midnight. On top of this, companies will now be required to return their VAT statement through the government’s new making tax digital scheme, increasing businesses’ tax compliance costs. Today also delivers a 1.25% increase in National Insurance contributions for businesses and workers. With the increased costs and admin coming into play in April adding to firms’ woes, around 250,000 businesses are concerned they will collapse soon, according to the Office for National Statistics. However, Lloyds Bank shows a regional divide in the prospects for businesses. London firms are the most confident, while those in Wales are very pessimistic.
