Research from Intuit, makers of QuickBooks financial management software for small businesses, has found that one month on from the VAT rate increase, small businesses in the UK have been largely unaffected despite widespread media hype. Two thirds (67%) of those surveyed confirmed that overall, the VAT increase has had no impact on their business.

Most small business owners (39%) chose to absorb the additional cost of the VAT increase rather than pass it on to their customers. Even when considering all the associated costs including admin, absorbing price increases and loss of revenue, almost 70% of small business owners claimed the VAT increase had cost them less than £350. When asked how much time they spent dealing with the change, 46% of small business owners estimated that they spent less than five hours managing the VAT increase.

When asked if increasing VAT is the best way to tackle the national deficit, 44% of small business owners said they agreed with the Government’s decision, followed by 13% who thought that raising income tax would be more effective. When looking for advice on how to manage the change, around one in five (19%) turned to other small business owners for support, and the same number turned to customer support from their accounting software firm to help them make the change.