As the coalition's austerity programme takes shape, it is clear that the private sector is far from immune to the swingeing public sector cuts and tax hikes. Despite moves to reduce the overall corporation tax rate, the punitive effect of the January increase in VAT is beginning to impact on medium-sized businesses across the UK, creating downward pressure on profits. In this month's Accountancy Credit Check survey, in association with Venture Finance, accountancy firms reported an increasingly squeezed middle as their medium-sized business clients report heightened pressures on cashflow, a growing incidence of late payments and stalled growth plans due to financial pressures.
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