VAT rise likely to increase supply chain pressure
July 15th 2010

The VAT rise is likely to have a major impact on the logistics sector according to OPS Logistics Consultancy.

The new Government has announced a 2.5 per cent rise in VAT which will come into effect on January 4.

Managing director of OPS Dan Derry said: “The tax changes will not only encourage the consumer to buy earlier this year to beat the rise but also create spikes in the demand to put increased pressure on the supply chain.”


Consumer trends show that people tend to avoid paying extra tax by buying large ticket items before any tax increases.



OPS has produced a white paper emphasising that in order to meet this change, businesses need to ensure that their respective supply chains have flexibility.

“The biggest challenge this year is not only coping with an unusual peak but also the subsequent slump,” added Derry.

“Post Christmas can always be a hit or miss affair, depending upon sales and consumer response, but this year we predict it to be quieter than normal, as consumer spending habits change in line with the effects of the budget and because people have less disposable money available.

“Therefore, logistics operations need to be planning ahead and being proactive to find alternative uses for supply chain resources or looking where infrastructures can be streamlined.”

The white paper can be found here.

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