Brian Hayes (Dublin South West, Fine Gael) | Oireachtas source

Section 61 of the Bill gives effect to the budget announcement to increase the VAT cash receipts accounting threshold from €1,250,000 to €2,000,000. This amendment proposes to increase the threshold further to €2,500,000. Deputy McGrath and others will be aware that as part of the budget announcement last year by way of the ten point action plans for SME business, the threshold was effectively doubled, which as the Deputy has acknowledged, has been a significant boost for people in business and, in particular, cash flow.

The cash basis can only be used for certain transactions or certain categories of taxable persons. It cannot be used to replace the normal VAT arrangements across the board which might be the case if an excessively high threshold were used given 66% of taxpayers are already using the cash basis system. In addition, an increase in the threshold to €2.5 million would be very costly to the Exchequer, costing an additional €12 million on top of the proposed €15 million cost of the budget 2014 increase. It is not neutral; there is a cost in terms of cash flow. The Deputy could, in terms of what he is proposing, be writing the budget speech for next year. The cost this year would be excessive.