4.—(1) A taxable person shall be eligible to apply for authorisation under regulation 3 Fabove if—
(a)he has reasonable grounds for believing that the value of taxable supplies made by him in the period of one year beginning at the date of his application for authorisation will not exceed £250,000;
(b)he has made all returns which he is required to make, and has paid to the Commissioners all such sums shown as due on those returns, and on any assessments made either under Schedule 7 to the Act, or under section 21 of the Finance Act 1985(1);
(c)he has not in the three years preceding the date of his application for authorisation—
(i)been convicted of any offence in connection with value added tax;
(ii)made any payment to compound proceedings in respect of value added tax under section 152 of the Customs and Excise Management Act 1979(2);
(iii)been assessed to a penalty under section 13 of the Finance Act 1985; or
(iv)had his authorisation terminated under regulation 10(1) below.
(2) The Commissioners may refuse to authorise a person under regulation 3 above where they consider it necessary to do so for the protection of the revenue.
(3) The scheme shall not apply to hire purchase agreements, conditional sale agreements or credit sale agreements.