VAT changes and cashflow

(I’m ignoring the fact I’ve not updated this site in months to bring you a half-formed thought about something I know virtually nothing about. Fun, heh?)

I’ve been wondering about the VAT changes that are coming in on Monday. If VAT and the savings of 2.5% really will make a difference to what people buy, which is surely the whole point, is it reasonable to expect that customers will wait until Monday to make any purchases that they may have planned for the rest of this week and this weekend?

If so, let’s think about the fact that this coming weekend is the fourth before Christmas and also the end of November. I guess that quite a few businesses use month end as a cut off point for income from third parties and perhaps also for their terms to pay bills. So, potentially, a drop in earnings for this weekend (which could have been expected to be high given the Christmas factor) could have quite an impact on cashflow, even if that cash does eventually come into the business at the start of December.

Just a thought.

(normal lack of programming will now resume…)