Sajid Javid set to curb ‘entrepreneurs relief’ in Budget

[adubya]

I will be surprised if it gets completely scrapped. Wouldn't be the first time a doom and gloom story is pushed to the media ahead of a budget following by the actual implementation being a watered down version.
To do this off the back of the IR35 change..... any rhetoric about being the party of business would be even more laughable than it is now.

[ChairmanMeow]

Poor timing given IR35

If they are to scrap it, it would be awful timing given IR35.


I am sure many are considering the future of their limited company given the market change (me included).

This would indeed be a swift sharp strike to the collective groin!

[shashin]

And as if by magic... it's going...


Rishi Sunak plans to raise GBP3bn by scrapping 'entrepreneurs' relief' | UK news | The Guardian

[ChimpMaster]

If they are to scrap it, it would be awful timing given IR35.


I am sure many are considering the future of their limited company given the market change (me included).

This would indeed be a swift sharp strike to the collective groin!

Poor timing for us but great timing for HMT and their tax collection regime. Can you imagine the dark evil that went into their downright pernicious plans: force IR35 onto everyone, remove ER so there's no tax benefit left, and raise CGT rates to income tax levels.

A 3-pronged attack that destroys everything you have worked for. No more retirement for the plebs.

[SeededLoaf]

Possibly 4-pronged if they cut pension tax relief too. No space left for any broom handles.

[MrContractor85]

Terrible news if proves to be true. All over The Times so it's definitely going to be impacted in some way

Anyone have any thoughts on how it would be implemented for those mid-MVL?

[jamesbrown]

Terrible news if proves to be true. All over The Times so it's definitely going to be impacted in some way

Anyone have any thoughts on how it would be implemented for those mid-MVL?

If they're really going to scrap it, then it would be scrapped for the 2020-21 tax year, I expect. I suppose they could introduce it from Budget day, but liquidation isn't something that you can do overnight anyway. So I would expect that distributions before 6 April would be OK, including for those mid-MVL. But Chris@Maslins might have a better guess...

[jamesbrown]

Poor timing for us but great timing for HMT and their tax collection regime.

Right. It's hard not to think that all the IR35-related MVLs haven't accelerated the review to "scrap it now". That said, ER has been on the chopping block for years and it fits the currently narrative (rich southerners).

[TheCyclingProgrammer]

Hard to be surprised about this to be honest - it’s such an easy target to get rid of and likely to be seen as positive by the majority if the public as it’s seen as a tax cut for the rich.

Whilst it doesn’t affect me right now as I have no plans of shutting down my business, in all honesty, the normal 20% CGT rate is still a very beneficial rate of tax if you have a decent 6 figure company reserve fund, when compared to the higher and additional dividend rates.

[Maslins]

If they're really going to scrap it, then it would be scrapped for the 2020-21 tax year, I expect. I suppose they could introduce it from Budget day, but liquidation isn't something that you can do overnight anyway. So I would expect that distributions before 6 April would be OK, including for those mid-MVL. But Chris@Maslins might have a better guess...

As you might have guessed, MVL Online is currently extremely busy, which is of course kind of good, but it's not "fun" busy. It's hundreds of people asking us to somehow know what the chancellor will announce, and when the impact will be from, and also do some clever wheeze to make their situation ok regardless of what's announced. Also expecting us to magically make third parties turn their things around really swiftly, despite it being entirely outside our control. Suffice to say it's all a bit stressful.

The uncertainty this government is causing, with entrepeneurs relief being a piddly matter relative to Brexit, is making life a nightmare for most business owners.

My own personal guess, and it's nothing more than that, is that anyone who had legally appointed a liquidator before 11 March 2020 would still benefit from the old/existing rules. Logic being liquidations aren't reversible, so would seem extremely harsh to change a tax law that impacts a situation where the individual had legally committed to it prior to the announcement of the change.

One thing the Tories have done a few times over the last decade or so is dribble a rumour about doing something a bit more severe than they actually do. This causes huge uproar, and then when the real change is announced (that's still bad, but not as bad), everyone breathes a sigh of relief. I wouldn't be surprised if this was the case here too.