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According to the Federation of Small Businesses (FSB) if the government genuinely seeks to increase the jobs available in the market it needs to increase the VAT threshold. According to a study by the Centre for Economics and Business Research, commissioned by the FSB 35,000 new jobs can be created just by increasing the VAT threshold. Businesses that wish to recruit more employees are unable to do s due to financial constraints. This can be changed if they have to pay VAT only beyond £90,000. Also by reducing the red tape that surrounds VAT compliance savings can be enhanced.
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