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Small businesses set for 'simpler cashflow management'
11/05/2007
Thousands of small businesses across the UK should now be able manage their finances more easily following alterations to the cash accounting scheme introduced by HM Revenue & Customs (HMRC).
Paying out a quarterly VAT bill has caused financing difficulties for many small firms, but now any business with turnover totalling less than £1.35 million can lighten their tax burden by deferring a payment until cash from a particular deal is received in full.
Previously, the threshold for eligibility for the scheme was set at turnover of no more than £660,000 and HMRC is convinced that the initiative's expansion will make cashflow management easier for an additional 50,000 or so small British businesses.
"VAT simplification schemes allow businesses various options to manage their cashflow better, and employ simpler record-keeping," said John Brandwood, senior policy manager of corporation tax and VAT at HMRC.
"By putting businesses in control of their own affairs, the aim is to enable them to decide what's best for them."
Paying out a quarterly VAT bill has caused financing difficulties for many small firms, but now any business with turnover totalling less than £1.35 million can lighten their tax burden by deferring a payment until cash from a particular deal is received in full.
Previously, the threshold for eligibility for the scheme was set at turnover of no more than £660,000 and HMRC is convinced that the initiative's expansion will make cashflow management easier for an additional 50,000 or so small British businesses.
"VAT simplification schemes allow businesses various options to manage their cashflow better, and employ simpler record-keeping," said John Brandwood, senior policy manager of corporation tax and VAT at HMRC.
"By putting businesses in control of their own affairs, the aim is to enable them to decide what's best for them."