A LEADING York business owner has warned some traders would go to the wall if a local version of VAT was introduced.

The Local Government Association (LGA) has written a review of council finance which includes a number of ideas for changes to the way councils collect their cash.

It has said that "no change is not an option," and includes an idea for a local sales tax, which could be charged as a local VAT.

But David Neal, secretary of Goodramgate traders' association, said that if the sales tax came in he would probably end up closing.

He said: "It is a recipe for disaster. I think I would have to shut up shop and other people on the periphery of town would be hit hard."

Mr Neal, part-owner of Enigma new age gift shop, added: "It is one tax after another. Sales revenues are not great set against the backdrop of rising rates."

Allen Strauss, proprietor of Christmas Angels, in Low Petergate, said a local sales tax would make it more difficult for businesses to compete.

"I am not enthralled by the idea at all," he said.

Len Cruddas, chief executive of York and North Yorkshire Chamber of Commerce, said a sales tax could lead to different tax rates and different prices in different parts of the country.

Cheap air fares meant the UK was now competing with other European cities as shopping destinations, Mr Cruddas added.

City of York Council leader Steve Galloway said he had discussed a sales tax and favoured its introduction in some form.

Updated: 10:43 Friday, November 21, 2003