3 Mar 2020
With Entrepreneurs’ Relief speculated for reform or at worse scrapped in next week’s Budget, we consider what this could mean for businesses.
Next week’s Budget is rumoured to bring changes to Entrepreneurs’ Relief. Entrepreneurs’ Relief currently provides business owners with a 10% tax rate when selling their business – an invaluable relief available for up to £10 million of lifetime gains. Abolishing Entrepreneurs’ Relief would be damaging for many business owners and their retirement plans and the rumours have faced wide criticism from a range of parties, including the Federation of Small Businesses.
What do we know?
Nothing concrete until the Budget on 11 March, however reforms to Entrepreneurs’ Relief were indicated in the Conservative Government’s manifesto. It is not known whether any changes will start from 11 March, the start of the new tax year in April 2020 or be delayed.
What can we do?
With only a week left to be sure that Entrepreneurs’ Relief is available, business owners are limited in action that can be taken in the timescales and there is of course no certainty at this stage. A delay would provide business owners with more time to plan for sale to secure the relief.
There may be specific action that can be taken, for example for holding company structures or company share plans. There is no certainty at this stage, however it is not worth ignoring!
Please contact us if you are concerned about the impact of removing or reducing Entrepreneurs’ Relief or need any assistance with planning.