Jan
04
2011
How VAT rise may affect company umbrella contractors in retail
Posted by Daniel Frost
Umbrella company contractors in the retail sector have been told that while some businesses will be able to absorb some of the cost of the VAT rise, others may be forced to inflict the rise on consumers.
Dale Atkinson, spokesman for the British Retail Consortium, acknowledged that there will be plenty of retailers that will be able to absorb a proportion of the increase – with some even being able to cope with covering the entire cost.
However, the expert believes that those in low, tight margin areas, such as company umbrella contractors in the grocery sector, may find this too difficult to maintain, with the customer having to account for some of the charge.
Mr Atkinson explained: "I think the areas that are most vulnerable to not being able to absorb the cost of VAT are those areas where consumers have to make a purchase … because that's where the margins are tightest at the moment."
The VAT increase came into effect from today (January 4th) and saw the standard rate jumping from 17.5 per cent to 20 per cent.
Umbrella company contractors in the retail sector have been told that while some businesses will be able to absorb some of the cost of the VAT rise, others may be forced to inflict the rise on consumers.
Dale Atkinson, spokesman for the British Retail Consortium, acknowledged that there will be plenty of retailers that will be able to absorb a proportion of the increase – with some even being able to cope with covering the entire cost.
However, the expert believes that those in low, tight margin areas, such as company umbrella contractors in the grocery sector, may find this too difficult to maintain, with the customer having to account for some of the charge.
Mr Atkinson explained: "I think the areas that are most vulnerable to not being able to absorb the cost of VAT are those areas where consumers have to make a purchase … because that's where the margins are tightest at the moment."
The VAT increase came into effect from today (January 4th) and saw the standard rate jumping from 17.5 per cent to 20 per cent.