March 01, 2011
Research by Investec Specialist Private Bank has revealed that a large percentage of Britain’s most successful entrepreneurs are concerned that the recent VAT hike will badly affect both their profits and the economy as a whole.
According to the research, 39% entrepreneurs surveyed are concerned about how the VAT hike to 20% this January will impact on the UK economy, while 6% are very concerned. In addition, 36% are concerned about the impact this will have on their own UK businesses, with 6% being very concerned about this.
But VAT is not the sole concern. Rising inflation is also having a detrimental impact on some of the businesses of leading entrepreneurs, with 59% claiming that they have had to make changes to their UK businesses as a result of this.
Worryingly for the economy, 3% of those surveyed claim inflation was instrumental in them having to close businesses, and 25% said that they have reduced the number of people they employ because of growing inflationary pressures.
"Despite some entrepreneurs having concerns about the impact that 20% VAT will have on the economy and their businesses, many are feeling more optimistic about their prospects this year when compared to 2010, and the vast majority are expecting to see a rise in their cashflow and revenue,” said Ed Cottrell at Investec Specialist Private Bank.
If, like many, you are worried about the effect inflation and VAT is having on your business, seek specialist financial advice. Bankruptcies and company liquidations have been one of the many unfortunate side effects of a deep recession, but financial advice can help save your livelihood if sought at the right time.
