Small business set for HMRC cashflow fillip
The taxman is to allow more small businesses to defer their tax bills in order to ease cashflow problems
From this month, the turnover threshold to be eligible for the cash
accounting scheme increases from £660,000 to £1.35m.
The scheme now allows businesses with turnover of less than £1.35m to defer
paying their quarterly VAT, until they have received payment from their
customers. Normally, firms must pay their quarterly return based on invoices
issued and received as opposed to money received and paid out.
John Brandwood, HM Revenue & Customs’ senior policy manager for
corporation tax & VAT, said: ‘We recognise a quarterly VAT bill can
sometimes cause a cashflow problem for some businesses, especially if their
customers are a little tardy at coughing up.’
After getting frozen out in Gordon Brown’s last budget, the move by HMRC
represents a significant consolation for the smaller business community, which
has felt neglected by the government while the large business sector has been
indulged.
The amendment means an extra 56,500 businesses will qualify for the scheme,
bringing the total number of businesses UK-wide to more than 810,000. This means
44% of VAT-registered firms can now enjoy simpler VAT, HMRC said.
The change has been introduced to allow more businesses across the UK to
benefit from easier ways to deal with VAT: ‘The CAS also means businesses can
get relief on the VAT element of any bad debts, without having to apply,’ said
Brandwood.
Two other VAT simplification schemes are also available: the Annual Accounting
Scheme which enables small businesses to pay their VAT in monthly or quarterly
instalments and the Flat Rate Scheme, which allows businesses to apply a flat
rate percentage to their annual turnover.
Brandwood added: ‘VAT simplification schemes allow businesses various options
to manage their cashflow better, and employ simpler record-keeping. By putting
businesses in control of their own affairs, the aim is to enable them to decide
what’s best for them.’
COMPANY REPORTS
Ex-Ahold exec gets seven years for fraud
Mark Kaiser, a former marketing executive who worked at Ahold’s US Foodservice
division, has been sentenced to seven years in prison by a federal judge for his
role in an $800m (£406m) accounting fraud. The judge said Kaiser ‘was the
organiser and the leader of this scheme’. Kaiser was convicted in November 2006
of participating in a scheme to create fake rebates from vendors to boost the
company’s profits and earn bonuses.
Accounting woes send Bausch & Lomb private
Eye-care product maker Bausch & Lomb has agreed to be acquired by the
private equity firm Warburg Pincus for £1.85bn in cash. The eyecare product
company had to restate past financial statements after accounting misconduct was
uncovered in its Asian and Latin American divisions.The 154-year-old company
said the private equity group had agreed to pay $65 (£33) per share. This was a
26% premium to the average price of the stock when buyout rumours began
circulating.
Private equity bosses face Treasury grilling
The Treasury select committee is to question five top private equity
executives on 20 June as part of an inquiry into the industry. The hearing will
mark the first time senior private equity leaders have had to answer to
politicians. Damon Buffini of Permira, Dominic Murphy of KKR, 3i’s Philip Yea,
Blackstone’s David Blitzer and Robert Easton from Carlyle will all attend the
hearing.