A 2.5 per cent cut in VAT could prove costly for small shops, according to one industry body.
It might interest retail insurance customers to know that the Forum of Private Business (FPB) believes the government move could backfire.
Nick Palin, the FPB's director of finance, explained that an item which sells for £4.99 now will cost £4.89 when the VAT reduction comes into effect on Monday.
"This shows how ill thought-out this reduction has been. All it does is increase the amount of time smaller retailers have to spend wading through bureaucracy."
Small retailers have better things to be doing than the administrative tasks that this change will involve, he added.
Earlier this week, chancellor Alistair Darling unveilved a business support package to help firms through the economic downturn.
As part of his pre-budget report, he outlined details of a £1 billion emergency fund which will be open to small firms in needed of short-term loans to tide them over.
