asked the Minister for Finance if he is aware of anomalies in regard to insurance policies taken out for inheritance tax purposes under the 1985 Finance Act; and if it is his intention to amend the particular section.
Written Answers. - Insurance Policies Anomalies.
70.
I am not aware of any such anomalies. If, however, a case is made that such anomalies exist then I will examine it carefully.
71.
asked the Minister for Finance if in view of the need to encourage the creation of smaller service companies, he will raise the present £12,000 VAT threshold to the level of £25,000 which pertains to goods.
I do not propose to increase the turnover threshold for VAT registration in respect of taxable services to the same level as that which pertains to the supply of taxable goods.
Registration limits are set so as to remove small businesses from the scope of VAT while having regard to the need to secure VAT revenue and minimise competitive distortions between registered and unregistered traders. A lower threshold for taxable services as opposed to taxable goods generally is justified on the grounds that greater scope for tax-based distortions of competition between registered and unregistered traders arises at a lower level of turnover in the case of services. I am satisfied that the respective turnover thresholds of £12,000 per annum for taxable services and £25,000 per annum for taxable goods generally, strike a fair balance having regard to all of these considerations. I would also point out that it was in response to complaints from traders in the services sector that, inter alia, they were being placed at a competitive disadvantage vis-à-vis their unregistered counterparts, that the previous annual turnover threshold for VAT registration for services of £15,000 was reduced to the present level of £12,000, by virtue of the Finance Act, 1983.