Computacenter Urges Organisations to Avoid ‘Panic Buying’ Ahead of UK VAT Increase

LONDON--(BUSINESS WIRE)--Computacenter plc, the European IT infrastructure services provider, today issues a stark warning to UK businesses, urging them not to fall into the trap of panic-buying with only 30 days left of the reduced 15% VAT (value added tax) rate, which is due to revert to 17.5% on 1^st January 2010.

“In the rush to take advantage of the lower tax rate, it is vital that businesses maintain their rigorous procurement procedures and not drop due diligence for the sake of a last-minute financial saving, which could prove costly later down the line.”

Whilst the rate of VAT generally doesn’t affect businesses as much as it does consumers as they are able to offset the VAT they pay on their purchases, this unfortunately does not apply to all industries - including many public sector bodies, financial services institutions and insurance companies.

These organisations are likely to bring forward planned buying from early 2010 into late 2009 to avoid this extra cost, which can make a significant difference on large transactions. Computacenter has already witnessed this in December 2006, when in Germany, a 3% VAT rate increase took place on 1^st January 2007.

Terry Walby, Director Solutions & Technology at Computacenter, comments: “In the rush to take advantage of the lower tax rate, it is vital that businesses maintain their rigorous procurement procedures and not drop due diligence for the sake of a last-minute financial saving, which could prove costly later down the line.”

“Within the technology industry and beyond, in response to a challenging economy, suppliers have taken the opportunity to run down stock holdings, improving their cashflow and reducing any risk of holding unsold inventories. This means that any sudden increase in spending, either as a result of the VAT increase, planned technology price increases for 2010 or organisations utilising unspent year end budgets, may find that manufacturers have insufficient inventory to meet demand.”

Walby concludes: “My advice is simple: Organisations looking to make purchases within the next 30 days should talk to their trusted suppliers straight away, how to best take advantage of the immediate opportunity with investments that are right for them in the long term; Suppliers, on the other hand, need to be ready for this spike in demand to ensure they have the stocks to realise a significant sales opportunity.”

About Computacenter

Computacenter is Europe’s leading independent provider of IT infrastructure services. We can advise customers on their IT strategy, implement the most appropriate technology from a wide range of leading vendors and manage their technology infrastructures on their behalf. At every stage we make our customers’ businesses sharper by removing cost, complexity and barriers to change across their IT infrastructures.

Our corporate and government clients are served by offices across the UK, Germany, France, the Benelux countries, Spain and South Africa. We also serve our customers’ global requirements through our extensive partner network.