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Open Reduce VAT rate for labour-intensive service-based businesses to 5%

Created by Zlata Ksen
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In our view labour-based services such as massage, yoga and dance studios, nail technicians, tailors and tech repairers buy few goods, so recover minimal input VAT, yet are charged 20% on nearly all revenue. We think this raises prices for customers and threatens small business viability.

We believe that the 20% standard VAT rate falls disproportionately on labour-intensive services. Unlike retailers and manufacturers, businesses such as massage, yoga and dance studios, nail technicians, tech repairers and tailors spend little on VAT-able goods, so reclaim little VAT. The cost passes almost directly to customers, reducing demand and straining small businesses. We urge the Government to introduce a permanent 5% VAT rate for defined labour-intensive services.

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    This petition will stay open until 26 April 2027.