Insider Media Limited

Retailers in Nottingham are being offered a free helpline to ease any struggles faced with the 20 per cent VAT rise in January. Professional services firm RSM Tenon has launched the Retail Survival Service which aims to help retailers prepare for the first quarter of 2011.

VAT is set to rise to 20 per cent on 4 January 2011, and according to RSM Tenon, the retail sector is set to suffer “a wave of administrations, closures and job losses early in the New Year”.

Many retailers have introduced pre-Christmas promotions and discounts earlier than normal in an attempt to drive sales, and the British Retail Consortium recently revealed that consumer confidence is falling due to forecast job losses in the public sector.

Dilip Dattani, director of the Nottingham office’s recovery and insolvency service line, said: “Larger retailers will have factored the rise in VAT into their forecasts and prepared for it as best they can.

“The sector has been hit hard over the last few years and businesses recognise that they should start sales earlier. There is a feast or famine effect. Retailers want to capitalise on the Christmas period as they know that everyone traditionally spends at Christmas time and tightens their belts in January. With the increase in VAT to hit early next year as well, there will be more tightening of belts than before. Q1 2011 is set to be a particularly hard time for retailers, hence the decision to launch our free advisory service at the start of December.

“Our team has enormous experience working with the retail sector, and we can quickly provide advice and suggestions that in turn can be quickly implemented. Although the months ahead are going to be extremely difficult, many retailers can prepare by taking early action in a number of areas. We want to help them make the right choices, and to help our retail sector emerge in good shape.”