Blog – December 2019
Firstly, seasons greetings from all at Prism Corporate Broking!
2019 has been a year when despite everything that politics and “uncertainty” could throw at it, the Tech sector has remained remarkably resilient. In truth the opportunities are enormous, and Brexit or Remain, the impacts of the digital economy will continue to manifest themselves.
For that reason we remain bullish about 2020.
So what’s in Santa’s Christmas stocking this year? It’s rare for us to be looking at party manifestos at this time of year but our eyes couldn’t help but notice that Entrepreneurs’ Relief is under attack.
“It is now widely recognised that Entrepreneurs’ Relief in its current form cannot continue, so we will scrap it and consult on a better form of support for entrepreneurs which is not largely just a handout for a small number of people.”
“…some measures haven’t truly delivered on their objectives. So we will review and reform Entrepreneurs’ Relief”
These from both main parties. Whatever your views as to whether this is a good or bad idea, it is clear that this tax relief is on the political agenda for reform – whether imminently or in the future. It highlights once again just how good the current capital gains tax regime is for owner managers. Comply with the rules and the first £10m of gains are taxed at a nominal 10% rate.
If the gains were taxed at your marginal rate for income tax (as proposed by at least one party) it would likely be taxed at 40% and possibly higher. In that regime you would need to sell your business for a 50% higher price to achieve the same outcome.
In the words of a former Prime Minister “you’ve never had it so good!”