VAT and fuel duty rises hitting firms

NILALM110111G1 - An increase in VAT has lead to a rise in fuel prices across Ilkeston
NILALM110111G1 - An increase in VAT has lead to a rise in fuel prices across Ilkeston

SHOPS, pubs and services in Ilkeston have all been affected by the recent VAT increase and rise in fuel duty.

Many business owners in the town said it was difficult to tell whether the slump in trade was due to the VAT hike, or whether it was because of the time of year.

But one thing they all agreed on was the importance of keeping customers shopping in Ilkeston.

David Thorpe owns Thorpe’s Furniture and is chairman of Ilkeston’s Chamber of Commerce.

He said: “The increase in VAT will have an effect but what I think is more worrying is the rise in costs for raw materials.

“As the price of raw materials continues to rise so does the price the customer pays. More important than anything is that we get people shopping in Ilkeston again.”

And duty manager at the Charter pub in South Street, Mary Holland, said things had been quiet over the last week.

“It’s been a quiet week but I don’t know whether it’s because of the VAT increase or because it’s just after Christmas,” she said.

A barman at the Sir John Warren, Kieran Keane, also said business had been quiet, but agreed it was difficult to tell whether it down to the VAT increase.

On top of VAT, fuel duty has increased, hitting the town’s haulage and transport companies hard.

Martin Barrett, the managing director of a transport company in Trowell, said he was passing inflated costs over to the customer wherever possible, but many just refuse to pay it, leaving him losing out financially.

Mr Barrett said: “It’s not the VAT so much because we can claim the prices back. It’s the cost of the diesel itself.

“In the past 12 months it’s gone up 9p a litre. We put the extra costs on wherever possible but not everyone will pay it and we end up losing money.

“We’ve not been making much over the last two years as it is. We are just having to absorb it.

“Thankfully we are in a position where we can, but that won’t last long.

“I think the next three months will be critical for the economy, particularly in this industry,” he said.

In the last week of December seven Haulage companies went bust – including one in Derbyshire and one in Nottinghamshire.