entrepreneurs relief - Autumn Statement

[swebb]

I read in the Times today that there are strong rumours of the chancellor of the exchequer will hit entrepreneurs relief on Wednesday as part of the autumn statement. As someone who is currently just about to kick off members voluntary liquidation of my company and currently awaiting for my accountant to finalise things before handing things over to a MVL specialist this has come as a bolt out of the blue and feels like a potential kick in the teeth.

When the chancellor introduces changes I assume they are immediate ? I'm worried I could face a large increase in tax closing my company because I can't file things in time

[BrilloPad]

I read in the Times today that there are strong rumours of the chancellor of the exchequer will hit entrepreneurs relief on Wednesday as part of the autumn statement. As someone who is currently just about to kick off members voluntary liquidation of my company and currently awaiting for my accountant to finalise things before handing things over to a MVL specialist this has come as a bolt out of the blue and feels like a potential kick in the teeth.

When the chancellor introduces changes I assume they are immediate ? I'm worried I could face a large increase in tax closing my company because I can't file things in time

Would it be from April 2016?

[swebb]

Would it be from April 2016?

Not at all sure to be honest, never really followed how these things work in terms of timescales.

I know that if it kicks in Wednesday then I will be gutted as I have just started proceedings to shut my company that I have run for 10yrs and was planning on using some of the money to help me finally buy a property

[jamesbrown]

Typically, this sort of announcement would come into immediate effect, in order to avoid the tax planning opportunity. However, eliminating the relief altogether would be the nuclear option. Several changes were announced in the last budget, several more could be announced in the AS, including a reduction in the lifetime allowance. They may go nuclear though. At this point, there's little you can do but wait.

[AtW]

Bad news for sure.

I reckon he will limit ability of many people to claim it in the first place and also increase rate to at least 15%.

Most likely PSCs won't be allowed to claim it in the first place.

[CKP Insolvency MVLs]

When the chancellor introduces changes I assume they are immediate ? I'm worried I could face a large increase in tax closing my company because I can't file things in time

I usually get a few accountants rushing to get their clients' MVLs through before any budget announcement on the off chance that cuts to reliefs they are banking on will have immediate effect.

Unfortunately I don't think there is any way to be sure, short of crystal ball gazing.

I know this is stating the obvious but I'll say it anyway..if you're the cautious type, like those accountant colleagues of mine, make sure the actual MVL distribution is made before the reliefs are cut, not just start the MVL.

[AtW]

Unfortunately I don't think there is any way to be sure, short of crystal ball gazing.

Their usual leaking to the press means things will be a lot worse for ER, don't expect Lords to block this measure so Osborne can do what he pleases...

[swebb]

I usually get a few accountants rushing to get their clients' MVLs through before any budget announcement on the off chance that cuts to reliefs they are banking on will have immediate effect.

Unfortunately I don't think there is any way to be sure, short of crystal ball gazing.

I know this is stating the obvious but I'll say it anyway..if you're the cautious type, like those accountant colleagues of mine, make sure the actual MVL distribution is made before the reliefs are cut, not just start the MVL.

Thanks for that, I assume though that to get to the point of distribution takes some time. My accountant has my final accounts as of last week. I will have to pay CT and VAT and that will be it in terms of company incomings and outgoing as far as I know at the moment. The accountant has actually given me the figures for the CT payment and VAT.

[CKP Insolvency MVLs]

Thanks for that, I assume though that to get to the point of distribution takes some time. My accountant has my final accounts as of last week. I will have to pay CT and VAT and that will be it in terms of company incomings and outgoing as far as I know at the moment. The accountant has actually given me the figures for the CT payment and VAT.

Depends how the MVL is setup.

If you have already transferred the cash at bank to an account controlled by the proposed liquidator or perhaps you have already drawn the bulk of funds leaving a Loan Account asset that will be distributed, then the liquidator could make the first distribution pretty much immediately at the start of the liquidation.

It's usually the first distribution that will be material for relief purposes as this will be for the majority of the company's assets and so is from where the majority of the tax the shareholders will have to pay is calculated.

If the liquidator has to get in your money from the company's bank, then it will take longer to do the first distribution and the timing of it is not really in your control.

The money has to come in and then the liquidator can deal with distributing it.

Unfortunately there's no way of knowing how quickly the bank will deal with transferring it. Some banks are quick, some banks are slow.

You already know the final CT and VAT figures so can pay those asap. If you didn't have time to pay those, the liquidator could pay them during the liquidation from the company's funds.

[TheFaQQer]

Typically, this sort of announcement would come into immediate effect, in order to avoid the tax planning opportunity.

Back in May, I briefly discussed ER with the guy that came up with it originally, and he mentioned the possibility of changes. His expectation was that if it changed, then it would be an immediate change.