Hampshire companies face an estimated £8.2m rise in their VAT bill in the next financial year, Southampton based accountants and business advisers HWB are warning.

The increase stems from the Chancellor's increase in VAT from the current level of 17.5 per cent to 20 per cent in a bid to tackle the UK's ballooning deficit.

A significant number of Hampshire's 62,000 companies will face a rise in VAT costs. But the true bill is actually likely to be far higher than £8.2m, with many of Hampshire's sole traders and partnerships also having to pay out more.

Nationally, the increase is going to cost UK business in the region of £300m, according to estimates from HMRC.

And the rise in Value Added Tax, which comes into force on 4 January 2011, will see shoppers pay more for most consumer goods. The Government's tax take on a £1,000 television purchase will climb from £175 today to £200.

Alan Rolfe, tax manager for HWB, said: "Businesses need to be aware that this change is just around the corner and that it is going to cost them money.

"We are advising businesses to be prepared and to consider making changes now. We would urge businesses concerned about what this might mean to contact us without delay."

For more of HWB's market leading advice, contact Alan Rolfe, Tax Manager on 023 80461200

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