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Cash flow scheme to be extended

A VAT scheme that helps relieve cashflow problems in small businesses has been extended.

From April 1, firms that qualify under the Cash Accounting Scheme can defer paying their VAT until they have been paid by their customers.

According to HM Revenue & Customs, the threshold for CAS will be more than doubled from £600,000 to £1.35million, indicating mid-sized firms will now be able to benefit.

The appeal centres on company owners only paying their VAT upon receiving payment from clients – as opposed to accounting for and paying VAT when they issue and receive invoices.

John Healey, financial secretary to the Treasury, said more than 50,000 businesses will benefit, becuase of the reduced pressure on their cashflow.

Feb 15, 2007
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