As a business owner myself, I was delighted to read in the latest Conservative manifesto that:
“We want Britain to be the best country in the world to start and grow a business – a place where entrepreneurs know they can build on their ideas and find success”.
However, I was less pleased and more worried in the same manifesto to read the following statement:
“We also have to recognise that some measures haven’t fully delivered on their objectives. So we will review and reform Entrepreneur’s Relief”.
Of course, the Conservative party may not be elected but I don’t think any of us are in any doubt that our next government will be on the lookout for extra tax revenues. If Labour are elected, they are likely to scrap the relief altogether.
The case to scrap the relief has been growing for a while but it’s demise now seems more likely that ever. It has cost the country £22 billion over the past 10 years. In 2019-2020 HMRC estimate is will cost another 2 billion pounds.
Recently Sir Edward Troup the former head of HMRC called on whoever wins the election to abolish ER as “It provides no incentive for real entrepreneurship”.
This statement comes on top of that made by the Association of Accounting Technicians who have urged the Government to scrap ER on numerous occasions over the last three years.
The Institute for Fiscal Studies (IFS) have stated that in general, company owner-managers respond to changes in income taxes by adjusting how and when they take money out of their company, but, where does that leave a business owner who is or was planning to retire in the next couple of years ?
In the coming 12 months, we could be seeing the last hurrah for this form of relief and to explore the full range of options open to you with no obligation, please feel free to get in contact with me, I will be please to outline all courses of action that are open to you.