Digital Marketing Budgets Seem To Be Unaffected By Impending VAT Increase

7 October 2010, 16:46

There seems to be a lot in the news recently about the potential effects the VAT rise could have on business and on the economy. The rate will change from 17.5% to 20% in January, but it doesn’t seem to be affecting everyone.

Recent research into the digital marketing that will be undertaken by various companies online next year seems to indicate that there will be no reduction in the amount spent. Even bearing in mind the increase in VAT there is every indication that it will be full steam ahead when it comes to promoting businesses online.

This is encouraging news as some sectors seem to be very wary of the consequences of the new rate of VAT. For instance high street shops are largely uncertain and wary about the effect the new rate will have on businesses. Some think that sales before Christmas will be healthy, only to dip when the New Year and the new rate kicks in.

In the end any news that comes before January is mere speculation. Some quarters obviously think the rise will affect them more than others. Perhaps the upbeat mood of digital marketers is due to the fact that this type of marketing is very cost effective. It could also be that digital marketers are getting excellent results from this type of marketing, and they will continue to invest in it even if they have to pay more in VAT in the process.

It is certainly refreshing to see some positive news coming out of the sector though. Everything we have read so far has either been negative or very pessimistic. We might do well to remember that the changes will happen whether we like it or not. The best thing is to think positively and make the most of the lower rate now, while also looking to the future to see how the higher VAT rate could impact businesses then.

The point is that the decision to increase VAT has been made. We must just wait to see how it will pan out in the future. Even when it comes into effect it could be some time before we realise the full effects it will have on businesses and individuals. Until then we must take this news about digital marketing in a positive way. Perhaps the increase won’t be as bad as some think.