New changes to the VAT rules will help SMEs manage their cashflow efficiently, a government minister has announced.Speaking at the Yorkshire Forward Conference in Bradford, the Treasury’s financial secretary, John Healey, announced that the threshold for companies to qualify for the Cash Accounting Scheme (CAS) would be increased from £660,000 to £1.35 million.Under the CAS, small firms are allowed to defer the payment of their VAT until they have received payments from their customers. Usually, firms must pay and account for VAT when they issue and receive invoices.With the increased threshold, which comes into effect on April 1st, more SMEs will be better able to manage their cashflow."Doubling the threshold of the Cash Accounting Scheme will allow more than 50,000 businesses to significantly improve their cashflow," said Mr Healey."We know that small businesses are the engine for the UK’s economy, so it is only right that we look to improve the climate for them," he added.Recently, a new data showed that UK SMEs ended the year on a high. The PKF SME index revealed that figures of the final quarter of 2006 demonstrated "robust performance" for the UK’s small and medium-sized businesses.© Adfero Ltd

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