Budget provides entrepreneurs with £80,000 giveaway
For entrepreneurs, Chancellor Alistair Darling provided a
potential £80,000 giveaway in today's Budget.
"Rather than raising Capital Gains Tax rates (CGT) as expected
by many, the Chancellor announced an increase in Entrepreneurs'
relief from £1 million to £2 million. This means that entrepreneurs
selling their businesses and qualifying for the relief should only
pay 10% CGT on their first £2 million of gains, saving them up to
£160,000 of tax as compared to £80,000 previously," commented Paul
Cooper, Tax Partner at Grant Thornton UK LLP.
"There is a catch for entrepreneurs who have already claimed for
relief on gains of over £1 million in the current tax year. Under
the proposed change they can not claim additional relief to the new
£2 million limit in this current tax year, but need to wait until
they realise other gains in the future."
Other changes
There were a number of other changes, including the well trailed
requirements for banks to lend more to small businesses.
"The idea of introducing a Small Business Credit Adjudicator to
review banks lending decisions is novel, but you have to question
whether it will be able to operate quickly enough for companies who
have been refused a loan and have their back to the wall," said
Grant Thornton's Paul Cooper.
"It is great that the government is setting up an equity growth
capital fund, although there is an element of "back to the future"
as 3i used to provide this kind of capital widely."
"The extension of the time to pay arrangements, which have
already helped over 200,000 businesses, is good news and to be
welcomed. Smaller businesses will particularly benefit from the
announced increases to the level of investment allowances and
business rate relief. But, we would have preferred a reduction in
the headline rate of corporation tax for small companies," Cooper
concluded.
For further information please contact:
Alexander Wessendorff, Grant Thornton press office, 020 7728
2048