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Some 56,000 businesses throughout the UK could be benefiting this month from changes made to the VAT cash accounting scheme (CAS).

The scheme is designed to help small-to-medium-sized companies cope with cash flow difficulties and, from 1 April 2007, the eligibility threshold was more than doubled from £660,000 to £1.35 million.

Broadly, the changes mean an extra 56,500 businesses can now benefit from the scheme, bringing the total number of businesses UK-wide to more than 810,000. This means 44% of VAT-registered firms can now enjoy simpler VAT accounting.

The Scheme allows businesses with turnover of less than £1.35 million to defer paying their quarterly VAT, until they have received payment from their customers. Normally, firms must pay their quarterly return based on invoices issued and received - as opposed to money received and paid out.

"We recognise a quarterly VAT bill can sometimes cause a cashflow problem for some businesses, especially if their customers are a little tardy at coughing up," says John Brandwood, Senior Policy Manager, Corporation Tax & VAT at HM Revenue & Customs. "Plus the CAS also means businesses can get relief on the VAT element of any bad debts, without having to apply."

The number of newly-eligible businesses which could benefit are broken down by region as follows: