“We also have to recognise that some measures haven’t fully delivered on their objectives. So we will review and reform Entrepreneurs Relief.”
Mr Johnson has also previously championed a loosening of state aid restrictions, imposed by the EU, which enables individual states to provide support to businesses of all sizes in their jurisdiction. Why is this important? Well the abolition of Entrepreneurs Relief with no replacement would appear to be inconsistent with the aims of government set out by them in their manifesto and Mr. Johnsons’ well documented own view.
Whilst the threat to the future of Entrepreneurs Relief is very real and should be taken seriously, there is clearly mixed message here and although the manifesto predates his recent comments, it is clear from the manifesto that efforts are being made to better support UK business. It will be interesting to see what form the review and reform of Entrepreneurs Relief will take and it is ultimately the case that we will have to wait and see. With this in mind there are a number of possibilities which in turn will give rise to further questions rather than providing answers:
- Entrepreneurs Relief remains in its current from (well there is nothing wrong with hoping for the best if you’re prepared for the worst)
- Entrepreneurs Relief remains but with modifications
- Entrepreneurs Relief is abolished but replaced by an alternative relief
- Entrepreneurs Relief is abolished with no replacement
At this stage it is no more than conjecture as to what may happen to Entrepreneurs Relief on 11 March 2020, although we must acknowledge there is no smoke without fire. In considering the above options, account should be taken of the government aims and objectives for business and balanced with which one would best meet these in a fiscally sensible manner. Unfortunately in the absence of a crystal ball, it is not possible to comment further however perhaps this gives some food for thought…
Finally, it is worth noting that with every change, there brings new opportunities. There may be planning opportunities in respect of any capital gains that you are likely to crystalise that will be affected for instance by reducing the amount of the gain that is actually subject to charge in the first place – bear in mind that 20% of zero gives an identical result to 10% of zero and that all may not be lost after all! Speak to us to discuss how we may be able to assist you if you are affected by this issue.
‘I have to tell you the Treasury is fulminating against it [Entrepreneurs Relief] because there are some people who are staggeringly rich who are using that relief to make themselves even more staggeringly rich.’
BoJo – January 2020