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Small Businesses

Volume 114: debated on Wednesday 8 April 1987

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asked the Chancellor of the Exchequer how the need to obtain a European Community derogation for the proposed scheme of value added tax cash accounting for small businesses will affect the timing of legislation and whether he will make a statement.

As my right hon. Friend announced in his Budget Statement on 17 March, he proposes to introduce the facility of cash accounting for businesses with an annual turnover not exceeding £250,000 on 1 October 1987, and the Government's request for a derogation from the sixth VAT directive to permit this was notified to the European Commission on Budget day. The Finance Bill, published today, contains in clause 10 powers for the Commissioners of Customs and Excise to make detailed regulations to implement the cash accounting scheme. In order to ensure compliance with European Community law these regulations will not be made until the EC derogation has been approved. Later this month I shall be placing in the Library a draft of the regulations in time to assist the House in its detailed consideration of the Finance Bill provisions.