§ Mr. Marlowasked the Chancellor of the Exchequer what would be the cost to the Exchequer and the savings in numbers of accounts if the value added tax threshold were increased by £1,000, £2,000, £3,000, £5,000, £7,500, £10,000, £15,000 and £20,000, respectively.
§ Mr. Bruce-Gardyne[pursuant to his reply, 9 March 1983, c. 410]: It is estimated that for increases in the registration limit up to about £10,000 taxable turnover a year, the loss of revenue in a full year might average about 494W £5 million for each £1,000 increase. This is on the assumption that (i) the deregistration limit was increased by the same amount and (ii) the proportion deregistering of those eligible to do so was similar to the proportions when the limit was raised in the past. Larger increases could cause such a change in the nature of the tax that it is not possible to make reasonably reliable estimates.
Information about the numbers of registered traders in narrow bands of taxable turnover is not readily available. However, if the registration limit was raised to £20,000, £30,000 or £40,000 taxable turnover a year, about 110,000, 300,000 or 410,000 persons, respectively, would no longer be under a legal obligation to be registered.
The total cost to Customs and Excise of collecting VAT in 1981–82 was about £144 million. Averaged over the whole of the registered trading population this works out at about £105 per registered person. No reliable information is available about the cost of administration 495W related to different categories of businesses; but the cost of collecting VAT from a small firm is believed to be less than the average for all businesses.