Following my recent article last week which discussed the potential reforms to Entrepreneurs' Relief (ER), the UK government has since been warned against these reforms, with any cuts to ER resulting in a 'significant blow' to business owners and entrepreneurs.
Industry groups have been quick to defend ER acknowledging that its benefits to business owners upholds the representation of the UK being a start-up friendly country.
As explained in my previous article, ER allows entrepreneurs to pay a lower 10% rate of capital gains tax when they sell their businesses.
Although business groups have agreed that there is room for reform, they have cautioned against any sweeping changes in the next budget.
Chairman of the Federation of Small Businesses, Mike Cherry, stated that any big changes to ER may adversely affect small business owners who have been planning for retirement with the understanding that ER would be claimed.
Tax partner at accountancy firm BDO, Paul Falvey, also warned against any cuts to ER stating that "Tax laws send signals about the entrepreneurship environment... We want people to invest and grow business and generate wealth. We need it more than ever".
These comments highlight concerns that even minor cuts may send a message that the UK is diverting from being a friendly start-up country.
Please follow our posts for further updates on ER following the budget.
Cuts to a tax break for entrepreneurs would be a “significant blow” to business owners