Letter: The use of VAT to penalise late payers

Sir: I must congratulate Colin New on his article 'VAT incentives to stop late payments' (9 March). Like the best ideas, it is brilliantly simple. And having previously served for 16 years with HM Customs and Excise, I can confirm that control of the issue could be comfortably undertaken by VAT staff on regular visits.

As a small businessman in my own right, trading with many large customers, I now understand that some big businesses shift their own financial burdens by blackmail on to those who are less able to bear the burden.

The banks ought to be happier dealing with better-heeled customers. The Government, which has twice recently commented on the issue in Budget speeches but then failed to act, may be encouraged by the incentive of increased taxation by default to take the simple action of making a new regulation.

Yours faithfully,

JAMES MACKIE

Witney, Oxfordshire