Small firms unaffected by VAT rise, report shows

Date: 8th February 2011

Small businesses operating in the UK have been left largely unaffected by the recent VAT rise.

On January 4th, the government imposed a 2.5 per cent increase, pushing the VAT rate up from 17.5 per cent to 20 per cent.

While there were fears the move would hamper small businesses, research from software provider Intuit has shown that more than two-thirds of enterprises feel the rise had no impact on their organisation.

The study also showed that despite the associated administration costs and loss of revenue, 70 per cent of those questioned said the increase has cost them less than £350.

Pernille Bruun-Jensen, managing director of Intuit UK, said: "It's reassuring to know that many small business owners have been able to cope with the recent VAT increase despite widespread predictions of doom and gloom.

"As this is the third VAT rate change in less than three years, those business owners who have been around for a while may feel that they have had enough practice to cope with the changes."

Posted by Jacob Williams