Entrepreneurs are popping up everywhere lately but just as quick as they’re appearing, they’re disappearing too. More and more wish to sell or give away their business and for a number of reasons. Regardless of why they wish to give their business away, many are seeing the benefits by selling their company at a reduced tax rate and it’s this reduced tax rate that’s known as, ‘entrepreneur relief’.
Many have maximised their financial gains thanks to entrepreneur relief or ER as it’s otherwise known, but what happens if the rumour mill is true and it is scrapped entirely?
Act Fast To Feel The Benefits Of Entrepreneur Relief
There are now incredibly strong rumours flying around that entrepreneur relief could be scrapped completely and they are filtering out from Downing Street itself. The rumours suggest the 10% tax rate on capital gains for Entrepreneur Relief could be scrapped in the coming March 11th budget review. Despite an impending Brexit which will see the UK in desperate need of entrepreneurs and start-up companies, Boris Johnson has expressed a concern that this tax relief is only helping those who are already ‘staggeringly rich’. In fact, he went on to add, “I have to tell you the Treasury is fulminating against it because there are some people who are staggeringly rich who are using that relief to make themselves even more staggeringly rich.”
The Conservative Manifesto Says It All
If the above quote directly from Boris Johnson doesn’t warn you enough, perhaps the Conservatives manifesto will, that promises to ‘review and reform entrepreneur relief’. The Conservatives believe it’s being too generous to investors and simply failing entrepreneurs by offering little to incentivise them.
Whether we should take this is with a pinch of salt remains to be seen as no final confirmation has been given. What is clear however is that we should without a doubt expect some changes, most certainly after the general election. If it isn’t replaced entirely which we can absolutely see happening, it will without a doubt be restricted or revised in some manner.
What Should You Do?
At this stage, it’s definitely worth considering that entrepreneur relief may not be around in the near future, if it’s something you’ve been thinking about. What will be in place of this relief, we simply cannot say.
With that in mind, if you have reserves in your company that you’re considering releasing, you may wish to do so now or in the very least, speak with a professional accountant about doing so and how you can before the possible abolishment of ER.
If you’d like clear, concise and professional accounting advice from the experts about entrepreneur relief and what to expect, contact Salient Accounting & Finance today on 01268 833 828. Rest assured you’ll be in safe hands with a company who work with you to maximise your wealth at all times.
