by business editor Trevor Sturgess

Rising fuel costs are a bigger worry than the Vat increase for many small firms.

Roger House, chairman of the Federation of Small Businesses in Kent and Medway, said he thought the impact of the fuel rises, made worse by the Vat rise from 17.5 per cent to 20 per cent, would be greater,

"It's fuel increases that worry me the most, with the mixture of fuel duty and Vat increase at the same time," he said.

"Certainly the fuel increases bother me.

"What worries me is businesses like retailers selling to private individuals who cannot reclaim Vat.

"They are going to be hit the worst. For those of us who can get the Vat back, it probably isn't going to make a vast amount of difference."

He thought time would tell whether the Vat rise would make much difference to consumer behaviour.

"I reckon it's going to take three to six months before we get any real impact. We just have to suck it and see."

Martin Lukehurst, owner of furniture retailer Gerald Lukehurst, with outlets in Rainham and Sittingbourne, said there had been a surge of business in recent days by customers keen to beat the increase.

But he was confident that people would get used to the Vat rise. Although there would be a short-term effect, he thought it would not make much difference in the longer-term.