The Government's proposals for simplifying VAT procedures for small firms are not all they are cracked up to be, according to a Sussex tax specialist.

The proposals are intended to make life easier for businesses with a turnover of up to £125,000 by introducing flat-rate bands of VAT based on turnover.

Geoff Davies, a partner at the Hove office on accountancy group Hacker Young, said the Government believed the proposals would take away much of the time involved in having to calculate and complete detailed quarterly VAT returns.

But the flat-rate scheme required a similar amount of work as the current system and was likely to increase a business's tax liability.

He said: "Rather than having to add up the tax due on all individual sales and then reducing this by the VAT incurred on every single piece of expenditure, a five-minute calculation on a calculator and dispensing with a bookkeeper or accountant sounds great but I have grave doubts.

"If the Government could guarantee these businesses would end up paying a similar amount of tax by adopting this scheme, fine. But, as it stands, they will have to invest the same amount of time and resource into completing the paperwork and may pay more tax than before."

Mr Davies said he had found anomalies in the proposed scheme that could adversely affect the fortunes of property investors, farmers, computer and technology service providers and people who carry out business abroad.