Did small firms benefit from rush to beat VAT rise

Date: 8th February 2011

Small business operating in the UK's retail sector could be among those to have benefited from a rush to beat the recent VAT rise.

On January 4th, the government increased the VAT rate from 17.5 per cent to 20 per cent and recently-published figures from the British Retail Consortium (BRC) have indicated that a number of people rushed to make last minute purchases before the rise took place.

Stephen Robertson, director-general of the BRC, said that while the increase is good news, weak comparisons mean organisation should not get too excited.

"On the surface, this is the best sales growth since last March, but that's not the whole story. Comparisons are with a feeble, snow-hit performance a year ago," he commented.

"Growth this January was driven by a relatively short but strong burst of non-food buying early in the month. Clearance discounts and a last chance to beat the VAT rise got people buying things like furniture and electricals in the first few days."

Posted by Emily Smith