VAT increase 'to hit small businesses'

13/08/2010

The upcoming VAT increase could have a long-term impact on small businesses it has been claimed.

According to former Apprentice winner and chief executive officer of the Bright Ideas Trust Tim Campbell, after the change many small companies will have to change their pricing structures, which will make them less competitive.

"I think, longer term, small businesses are going to face massive problems around the VAT increase that's coming," he said.

George Osborne announced the VAT increase as part of June's emergency Budget. It will rise from the current level of 17.5 per cent to 20 per cent from January 4th 2011.

The VAT rise could also hit small businesses' costs as the prices of essentials such as business energy are likely to rise.

Mr Campbell also stressed the importance of helping small businesses plan for such changes, and make sure they know where to go for the support they need to help them in difficult times.

Posted by Nicola Richards