The VAT Rise and The Enterprise Allowance Scheme are Creating a More Competitive Workplace, According to van Leasing Company

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Despite a feeling of caution as a result of the recent VAT hike to 20% and the increase in SME start-ups as a result of the governments’ launch of The Enterprise Allowance Scheme, Roy Ganley of First Step Leasing advises that it will simply create a more competitive marketplace for both businesses and customers.

Citrone Relay Van

Citroen Relay Van

Leasing a van for your company is indeed the most frugal and affordable option for SMEs

As the UK government aims to cut the deficit by boosting tax revenues and everyone feels the effects of the new 20% VAT rates, the owners of small and medium sized businesses will no doubt be feeling the squeeze and will be trying to predict and budget for a potential drop in turnover.

In recent research conducted by Aldermore, online bank and specialist lenders to small and medium-sized businesses, 35% of the companies surveyed said the VAT hike would affect them, with many commenting that they would be applying for extra funding from a variety of sources. As SMEs pay VAT to HM Revenue & Customs before customer payments are received and processed, the increase will be reflected in a substantial chunk of their working finances. Aldermore’s Chief Executive, Philip Monks, said ‘the temptation for clients of SMEs to sit on invoices longer to shore up their own cash flow in response to the VAT rise will be difficult to resist.’

Roy Ganley, of Bolton based van leasing company, First Step Leasing, understands the pressures currently faced by the owners of small businesses and the difficulties that may lie ahead in regard to predicting the knock-on effect of the VAT hike.

‘I’ve been in the motor industry for twenty years, and this isn’t the first time I’ve read warnings about the current financial market. But there’s also some good, positive news on the horizon. October 2010 saw the launch of the New Enterprise Allowance scheme by the Government, encouraging long-term recipients of Jobseekers’ Allowance to start their own businesses and thus create their own jobs. This is good news as the scheme will create profit for business to business companies, but also, as customers, we will soon have a wider choice of where we spend our money across a variety of industries within the marketplace.’

David Cameron described the New Enterprise Allowance as responsible for the coming years being ‘some of the most entrepreneurial in our history,’ as the scheme provides business advice in the form of mentors and loans to go towards start-up costs, such as computers, business stationery, contract leasing company premises, and depending on the nature of the company, vans contract hire.

Leasing a van for your company is indeed the most frugal and affordable option for SMEs, as it allows a flexible time period to which the van will be used without having to dedicate a large portion of your budget into actually purchasing a vehicle. Since the launch of the New Enterprise Allowance, we’ve seen the amount of companies leasing vans rise as established SMEs invest in growing their business and also start-ups where expert vans are essential.’

‘Leasing company vehicles is very affordable and allows you anything from a single dispatch van to a small fleet, allowing companies to stay ahead in the increasingly competitive marketplaces.’

Some may recognise the similarities to Thatcher’s Enterprise Allowance Scheme from the 1980s, which was quite successful. ‘Superdry’, the clothing label by Julian Dunkerton, was created as a result of the scheme which also offered both weekly payments and free advice and support from business mentors to participants.

Philanthropist and up until recently on the BBCs Dragon’s Den, James Caan said that the scheme would increase the amount of start-up businesses, and was ‘great news for budding entrepreneurs’ allowing individuals from all walks of life with both skilled and unskilled backgrounds to create their own jobs.

Business and Enterprise Minister, Mark Prisk commented ‘The New Enterprise Allowance is an innovative programme that will help people facing disadvantage to move off benefits and forge a better future.’

Roy Ganley, however, is optimistic. ‘In my own day to day business, I am seeing the effects of both the VAT rise and an increase in start-ups from the New Enterprise Allowance, and although there is a general feeling of caution from both businesses and customers alike, preparing for the surge in competition to your industry is a very wise move indeed.’

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