§ Mr. BurnsTo ask the Chancellor of the Exchequer when a fresh Treasury order will be laid before the House to update the payments-on-account scheme for VAT.
§ Mr. Kenneth ClarkeThe current annual cycle for the payments on account scheme runs from October to September. To avoid the timing difficulties caused by the move to a November Budget the scheme year will be realigned with the fiscal year to run from April to March.
The current scheme, which was intended to last for one year, will continue to the end of March 1995. The current VAT Payments on Account Order 1993 will therefore be replaced in time for the annual cycle beginning in April 1995.
This will mean that some businesses may be kept in the scheme for six months longer than expected, but the provisions for having payments reduced and for leaving the scheme where annual liability falls below £1.6 million will still apply in appropriate cases.
When the current order is replaced it will be amended to provide for automatic rolling forward of the scheme year in future without the need for a fresh statutory instrument.
Customs will conduct a review of the operation of the scheme. A consultation paper will be issued and all interested parties, including businesses in the scheme, will be offered the chance to participate in the consultation process.
The consultation paper will aim to address the concerns expressed by businesses about the scheme and to consider the scope for greater flexibility in its operation.