§ Mr. Steenasked the Chancellor of the Exchequer (1) if he will estimate the effect on the number of traders making value added tax returns if the value added tax threshold was raised to £100,000;
(2) if he will estimate the effect on value added tax revenues if traders whose throughput is less than £100,000 per annum were excluded from value added tax returns.
§ Mr. BrookeIt is difficult to predict with confidence the effects of a large rise in the threshold on the number of traders registered and the tax yield; experience suggests that a substantial number of traders who would be eligible to opt out of the value added tax system would, for sound commercial reasons, choose not to do so. I refer my hon. Friend to the estimates for the effects of a rise in the threshold to £50,000 which I gave to my hon. Friend the Member for Romsey and Waterside (Mr. Colvin) on 4 December 1985 at column253. I regret that corresponding 409W figures for an increase to £100,000 would be subject to a proportionately greater degree of uncertainty and could not be regarded as statistically sound.
§ Mr. BrookeThe cost is £191.3 million in 1984–85 —about one penny for every pound of net revenue.