§ Mr. Tim SmithTo ask the Chancellor of the Exchequer how many value added tax registered traders are eligible to adopt cash accounting; how many have done so; at what cost; and what would be the cost were all those eligible to adopt cash accounting.
§ Mr. RyderOf the 1.7 million businesses registered for VAT, 1.3 million are eligible to apply for cash accounting as their taxable turnover is less than £250,000 a year; but of these, only an estimated 375,000 businesses would benefit from the scheme. Businesses which already benefit from other special schemes, for example, those for retailers and those that regularly receive repayments of tax from Customs and Excise, would gain no additional benefit from cash accounting. To date, some 85,000 businesses have adopted cash accounting at an estimated take-up cost to the revenue of £40 million. If all businesses that would be likely to benefit adopted the scheme the estimated cost to the revenue would be about £180 million.