Tax specialist warns Budget could force owners to rethink selling their business
A tax specialist has warned changes to two key measures in the upcoming Budget could provide a further headache to individuals trying to sell their business.
Anne Rose, head of tax at accountancy firm Burgis & Bullock, says changes to Entrepreneurs’ Relief and upping Capital Gains Tax could force business owners to think twice about selling their company.
The Chancellor, Rishi Sunak MP, will deliver his first Budget on Wednesday, March 11, and it is believed that the two initiatives could be targeted by the Government to boost its tax intake.
Anne said: “The prospective change to Entrepreneurs’ Relief has already proved disruptive and there has been some movement from individuals who want to try to rush business sales through before the Budget.
“The relief is an easy piece of legislation to modify, and whether it is an instant removal or a restriction of the limits on the relief, we expect there may well be some form of change.
“In the Government’s manifesto they committed to no increases in VAT, income tax or National Insurance. But there was no promise made on Capital Gains Tax.
“Capital Gains Tax rates have been lowered significantly in recent years and it is thought there may be an attempt to recoup some of that money.
“If a limit was put in place on Entrepreneurs Relief and they chose simultaneously to put Capital Gains tax up to, for example, 28 per cent, it could make it difficult for people who have already done their sums to continue with their business sale.
“It would be very harsh on businesses for the Government to change both, but it can’t be ruled out.”
Tax specialists and advisors Burgis & Bullock has offices in Leamington Spa, Nuneaton, Rugby and Stratford upon Avon.
Anne added: “Certainty is the thing that everybody craves in business, and the last thing people want is more vague statements and uncertainties around what is going to happen on the tax front.
“There is an expectation that there will be some rates relief for retailers and pubs, which would be very useful for high street independents.
“We could also see changes to pensions tax relief, with the Government withdrawing the higher rate of relief that individuals get when paying their contributions in. This does cost HMRC quite a lot of money.
“It would be good to see more incentives to boost the use of electric vehicles too, whether that is to help automotive manufactures or to further encourage consumers to buy them.”