There is still the chance for you to capitalise on the extremely low 10% capital gains tax rates which are on offer via Entrepreneurs’ Relief, whenever you fully or partially sell your company.
However, time is running out as there are already signs from the government that they will be applying the brakes on small business owners, by clamping down on the numerous available tax breaks for entrepreneurs.
The Budget in 2015 was the first instance where these brakes were applied on Entrepreneurs’ Relief, by limiting the kinds of people and businesses able to claim it.
Ultimately, the total amount successfully claimed against capital gains tax bills is expected to drop from £3.5 billion of the previous two years to £2 billion in 2017, according to the HMRC.
It is looking increasingly likely that in the absence of any rise in income tax or national insurance rates, capital gains tax could be targeted in order to help fund public services.
With the recent increase in tax rates on dividend payments, as well as the rise in tax-free dividend allowance, it is clear for all to see that business owners will soon begin to feel the squeeze, with the General Election providing little in the way of reassurance.
Additionally, with the recent talk regarding a possible relaxation of the wage cap within the public sector, it would appear that further measures are in place to come down hard on entrepreneurs’ tax breaks.
Therefore, if you are considering a sale of your company, do it sooner rather than later.
If you are seeking advice on this topic, then please feel free to call us on 0161 359 4400.