§ Rev. Martin SmythTo ask the Chancellor of the Exchequer if he will make a statement about the operation of the value added tax cash accounting scheme; and whether he has any plans(a) to adjust the turnover level of £250,000 to take into account changes to the retail prices index and (b) to review the level of the threshold.
§ Mr. LilleyThe cash accounting scheme was introduced on 1 October 1987 and is available to businesses with an annual taxable turnover not exceeding £250,000. It is used by about 60,000 businesses. Customs and Excise have recently consulted representative bodies and small businesses to consider all aspects of the scheme with the aim of improving take-up. The views of those who responded are currently being considered and the outcome of the consultation will be announced in due course. The existing turnover limit is significantly higher than that originally proposed and required the formal agreement of the European Commission. Any further increase would also have to he approved by the Commission.