A FAIRER DEAL FOR SMALL BUSINESSES ON VAT THRESHOLD

To ease the burden of VAT on small businesses, the VAT registration
and deregistration thresholds will be raised from 1 April 1999, the
Chancellor announced today. The increases are broadly in line with
inflation and will support business enterprise and growth.

Customs also announced that they will be working further with
business to explore whether it is possible to cushion the impact of
VAT registration on growing businesses.

DETAILS

From 1 April the VAT registration threshold, which determines when a
person becomes liable to be registered, will be increased from
#50,000 to #51,000 and the deregistration threshold from #48,000 to
#49,000. The registration and deregistration thresholds for
acquisitions from other EU countries will also be increased from
#50,000 to #51,000 on the same date.

Last year Customs consulted businesses on future changes to the VAT
registration thresholds. Business was invited to comment on a number
of options and on the desirability of change. The announcement today
takes account of written responses from business and their
representatives.

Copies of the consultation summary report can be obtained from Linda
Robinson at the address below.

HM Customs and Excise
VAT Policy Directorate
Collection Division
Registration Branch
4th Floor South West
Queens Dock
Liverpool, L74 4AA

Fax: 0151 703 8397

NOTES FOR EDITORS

1. Against an indexed base, the estimated cost to the Exchequer of
increasing the thresholds is nil.

2. Details for businesses are published in Budget Notice 3/99, which
is available from Customs & Excise Advice Centres and from the
Customs & Excise Internet site.

Press enquiries only to HM Customs & Excise, Public Relations Office,
New Kings Beam House, 22 Upper Ground, London, SE1 9PJ. Telephone:
0171-865 5471/5472

Others should contact their local VAT Business Advice Centre, listed
under Customs and Excise in the telephone book.

Customs and Excise Internet address:
http://www.hmce.gov.uk

This news release can also be found at:
http://www.hm-treasury.gov.uk

Other Treasury material can also be found at this address.

# = pounds sterling