Jan
05
2011
Company umbrella contractors 'may see prices rise as well as VAT'
Posted by Daniel Frost
A variety of strategies will be used to deal with the VAT increase, those with an umbrella company in the retail sector have been told.
Some businesses may choose to attempt to defray some of the VAT rise to their customers, with slogans like "We'll pay the extra VAT for you", according to Nick Bamford, chief executive of Informed Choice.
On the flip side of the coin, company umbrella contractors may notice that some retailers decide not only to put the VAT rise onto products, but increase prices for them too.
However, the expert warned that clients need to look at whether their goods or services are essential or not to consumers, as well as how competitive their sector is, before using this method.
Mr Bamford commented: "All businesses want to try and get the benefit of increased revenue and profitability … It is down to each individual sector or firm to decide just how price sensitive their [goods] are."
Already, seven out of ten Brits have reconsidered splashing the cash in 2011 on big purchases, such as a new car, because of VAT going up from 17.5 per cent to 20 per cent.
A variety of strategies will be used to deal with the VAT increase, those with an umbrella company in the retail sector have been told.
Some businesses may choose to attempt to defray some of the VAT rise to their customers, with slogans like "We'll pay the extra VAT for you", according to Nick Bamford, chief executive of Informed Choice.
On the flip side of the coin, company umbrella contractors may notice that some retailers decide not only to put the VAT rise onto products, but increase prices for them too.
However, the expert warned that clients need to look at whether their goods or services are essential or not to consumers, as well as how competitive their sector is, before using this method.
Mr Bamford commented: "All businesses want to try and get the benefit of increased revenue and profitability … It is down to each individual sector or firm to decide just how price sensitive their [goods] are."
Already, seven out of ten Brits have reconsidered splashing the cash in 2011 on big purchases, such as a new car, because of VAT going up from 17.5 per cent to 20 per cent.