VAT Change To Boost Business Cashflow

12 Mar 2007

VAT Change To Boost Business Cashflow

Financial Secretary to the Treasury, John Healey, has announced that a special scheme aiming to help cashflow in small firms has been extended from 1 April 2007.

The Cash Accounting Scheme (CAS) allows eligible businesses to defer paying their VAT until they have received payment from their customers, as opposed to accounting for and paying VAT when they issue and receive invoices.

From 1 April 2007 the threshold for CAS is to be more than doubled from £660,000 to £1.35 million. Changes to the VAT scheme aim to help small to medium-sized companies (SMEs) cope with cash flow difficulties.

John Healey said: "Doubling the threshold of the Cash Accounting Scheme will allow more than 50,000 businesses to significantly improve their cashflow. We know that small businesses are the engine for the 's economy, so it is only right that we look to improve the climate for them."

For further information please visit the HM Revenue & Customs (HMRC) website at: www.hmrc.gov.uk