You would think that at a time when small business needs as much support and encouragement as possible the Chancellor and HMRC would be looking at ways of giving more incentives to them rather than taking them away. But no, they keep meddling in business matters very often with little realization as to the long term or wider impact of their actions. Small business owners spend a lot of their money on the business itself rather than on other things like pensions, in fact when we speak to many of our member’s they say their business is their pension.
So the removal of Entrepreneurs relief which enables some small business owners to pay only 10% capital gains tax when they sell would penalize these owner operators who have spent many years and a lot of money investing in and developing their businesses. A bit like Mr Osborne’s changes to the dividend tax rate, it was aimed at one section of the business community and ended up damaging a lot of small business owners who often paid themselves very low wages but took a dividend if the business performed well.
If a small business owner has invested heavily in his business with the expectation of receiving some well earned tax relief when he sells it through the Entrepreneurs relief scheme then it should not be removed as this is likely to prevent much needed investment and growth at a time when we really need it.