§ Mr. Latham
asked the Chancellor of the Exchequer what estimate he has made of the financial loss to Government revenues if the exemption threshold for value added tax were raised to £50,000 (a) for the remainder of the current financial year and (b) for the financial year 1987–88.
§ Mr. Brooke
The revenue loss would depend crucially on the number of businesses that decided to deregister if the exemption threshold were raised. But the loss in 1987–88 from an increase in the threshold to £50,000 could90W be expected to be between £100 million and £200 million. The effect on revenue in 1986–87 of an immediate change cannot be estimated because of uncertainties about the likely timing of businesses' decisions to deregister, but it would probably be slight.