Yorkshire SMEs ride out VAT rise

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Small and medium-sized firms in Yorkshire and Humber are taking the start-of-the-year VAT increase in their stride, according to the latest Close Invoice Finance Business Barometer.

Close says that, despite predictions of doom and gloom, more than 44 per cent of Yorkshire SMEs reckon the increase has had no effect, compared with a UK average of 39 per cent.

Forty eight per cent of Yorkshire and Humber firms said the impact of the 2.5 per cent rise was small, yet the percentage of Yorkshire and Humber firms passing on the rise to customers was 37 per cent.

That was lower than anywhere else, apart from Northern Ireland, at 30 per cent, and compared with a national average of almost 51 per cent.

Ian Steward, local head of Close Invoice Finance said: “It’s heartening to discover that the majority of businesses polled aren’t experiencing any major adverse effects of the recent VAT hike.”

Mr Steward said 39 per cent of SMEs in the region had expected difficulty in coping with the rise, but it seemed that, for many, those fears hadn’t materialised.

One in 10 SMEs in the UK previously stated that they believed the increase would put them out of business in early 2011, said Mr Steward.

That compared with compared with one in 100 now.

“It’s reassuring to learn that these businesses, who are undoubtedly vital to our economic recovery, have been able to deal with the change,” he added.