In a research poll undertaken by Swinton Vans, a department of the Swinton insurance company, it was found that two-thirds of van drivers are considering getting a new van before VAT rise.
67% of the 1,200 van owners that were questioned, responded that they were thinking about purchasing a new van before the new VAT increase up to 20%, which will take effect January 4th, 2010, in an attempt to save money on the purchase.
That’s not the extent of the cost increase for van owners, there is a 1% increase in Insurance Premium Tax which mean van insurance premiums will go up at around the same time too.
This comes at a time when the economy is struggling to restart after leaving behind recession status, and is sure to have a negative impact on a number small and medium enterprises (SMEs) who rely on vans for daily business activities.
This is likely to lead to a knock-on effect where smaller businesses are forced into increasing prices to cover costs, which will drive away customers to large companies who are better able to absorb the extra costs themselves.
As an example of the cost increase from VAT on a new van, a Ford Transit minimum cost is £17,155 on the official website, which equates to an increase of £428.89 when the VAT rises to 20%.