I agree that this is the most significant piece of VAT legislation so far as it affects the small trader. The Minister has correctly pointed out that it has two important elements. The first is the increase to £30,000 the amount which one must exceed before one is liable to register. Secondly, this is on an annual basis rather than on a two-monthly basis. Previously the position was, when the limit was £18,000, that if in any two month period sales went over £30,000 you were in respect of that period under an obligation to register, and the question of getting yourself de-registered in that kind of a situation did not apply. There should be quite a number of seasonal occupations in which people will be able to de-register and as a result it will be welcomed.
There are two specific points I would like to put to the Minister and ask him to bear in mind when next he considers a Finance Bill, and that is that the £30,000 now that it has been established and is generally welcomed in the business community, should be inflation-proofed. It should either be done automatically by way of a clause being inserted in the next Finance Bill or it should be done successively on each occasion. Now that £30,000 has been seen to be a reasonable sum there is no logical reason why that cannot be changed annually. If inflation is 10 per cent in the next year, the sales figure would go to £33,000; if inflation should be a bit higher it should go higher.
Now that the excellent principle has been established by the Minister, I do not see why we should have to go through a period of diminishing returns before it will be revised again. If it makes sense now I think it should be revised every year. It would reduce the amount of paper work and bureaucracy.
The Minister will also be aware that one section of the community are very seriously inconvenienced by the existence of this legislation. They are the craft workers who operate through the Craft Council of Ireland. They have been making representations to the Minister. I would like the Minister to give some further consideration to inflation-proofing while recognising that he has met a substantial portion of their problem here. I would like him to give some further consideration to whether it would be possible to arrive at a definition of "craft work" to which definition a different rate of value added tax, a low rate one would hope, could be applied. There is a great future for people of an artistic talent for the manufacture and sale of craft material.
What has happened to craft workers, particularly those involved in precious metals, is that the £30,000 would be of little benefit to them as the £30,000 would be exceeded easily. They are selling a line which is slow moving, which they are selling to large department stores and they have to make their VAT returns at the end of each two month period and pay the VAT on their sales prior to receiving payment from their customers. This is one of the major problems of those who do not have economic muscle, who are not in a position to go to the very large supermarkets or even the large jewellers of the country and say "Pay me now or I will not supply the goods in future." They are seriously inconvenienced because while they are not in a position because of their relative economic weakness to insist on being paid within a two month period, the Revenue Commissioners demand payment.
A way to overcome that is first of all to consider the question of whether one can redefine "craft workers." or secondly to introduce in respect of a further category of small traders, maybe those with turnovers between £30,000 and £100,000, a system whereby they would remit their value added tax on the basis of cash receipts only. If they did that, which is acceptable with regard to some types of trade, those in the manufacturing side, particularly small manufacturers, would be relieved of this considerable tax problem which they have. There would be an initial and once off reduction in the amount of money being received by the Exchequer but it would resume at its normal pace.
Two points should be considered. One is the question of whether it is possible to redefine "craft workers" and put them into a special category of their own. Secondly with regard to small industry in general, is it possible that another category would be introduced between £30,000 and £100,000 and those who fall within that category would be liable to make the returns on a cash receipts basis only?