Small firms face double hit from snow and VAT hikes

With up to a quarter of small businesses forced to close during the recent severe weather and heavy snow fall, many for at least five days and overall costing the majority up to £5,000.

These figures come from a snap poll of 1,300 members of the Federation of Small Businesses (FSB). A staggering 24 per cent of small firms said they had to close, of these 37 per cent said they closed for up to five days caused by a number of reasons such as transport disruptions, staff absences and loss of access to their premises.

If the Severe weather was not damaging enough, a second blow to Small business has hit in the form of VAT. On 4 January planned tax increases came into force, raising VAT to 20 per cent and putting fuel duty rates at a record high. More than a third (39%) of small businesses said that the rise in fuel duty will have a significantly impact their business, followed by the rise in VAT (27%), while only 24 per cent saying snow had had a similar impact.

With small firms currently under so much pressure, the FSB is calling on the Government to put in place its promised fuel duty stabiliser – a mechanism to ensure an automatic freeze on fuel duty increases and a reduction in duty to match any increases in VAT revenues from higher pump prices – to avoid a relentless flow of fuel duty increases.

Get our essential weekday HR news and updates. Company This field is for validation purposes and should be left unchanged. Work Email Keep up with the latest in HR... This field is hidden when viewing the form Optin_form This field is hidden when viewing the form Optin_date Year Month Day This field is hidden when viewing the form Batch_Newsletter

John Walker, National Chairman, Federation of Small Businesses, said:
“Heavy snowfall and severe weather has put a strain on already hard-hit small firms at such an important time for businesses. This coupled with the increase in VAT and the huge rise in fuel duty is really tarnishing the potential of small businesses, at a time when the Government is putting much of its hope into the sector to put the economy back onto firm ground.

“While the Government cannot control the weather, it can reduce the impact record fuel duty rates has on everyone, not just small businesses. As small firms recover from the severe weather, the same cannot be said for the tax increases which the Government have said are here to stay. It is unacceptable that the Government has u-turned on its manifesto promise to introduce a fuel duty stabiliser and it is vital we see this put in place immediately to remove some of the strain from small businesses so they can get on with the job at hand of creating jobs and helping to grow the economy.”