Shorter Reads

General Election: party manifestos confirm coming CGT Entrepreneurs Relief changes

1 minute read

Published 24 November 2019

Authors

Share

Key information

All parties have now published their election manifestos.  Each contains proposals which would affect business owners and entrepreneurs.

I previously predicted that altering or abolishing CGT Entrepreneurs Relief would be fairly low-risk for an incoming Chancellor of the Exchequer.  It seems that is coming to pass.

This update briefly summarises the key proposals of the UK’s three main nationwide parties relating to entrepreneurs and business owners.

LIBERAL DEMOCRATS

The Liberal Democrats have least to say about Entrepreneurs Relief, not directly mentioning it at all.  Relevantly, they would abolish the CGT annual exemption (currently worth £12,000).  They would also introduce a new General Anti-Avoidance rule (presumably in place of the current General Anti-Abuse Rule) and increase Corporation Tax to 20%.

LABOUR

Labour’s manifesto contains a great many tax proposals.  Taxpayers earning more than £80,000 a year are warned that they will face higher taxes overall.  The headline rate of Corporation Tax would increase to 26% by 6 April 2023.  Meanwhile, CGT rates would be harmonised with Income Tax and Entrepreneurs Relief would be abolished outright and Labour would “consult on a better form of support for entrepreneurs which is not largely just a handout for a small number of people.”

CONSERVATIVES

The Conservatives comment that “some [tax] measures haven’t fully delivered on their objectives” and, as a result, they propose to “review and reform Entrepreneur’s Relief.”  They have not yet brought forward details of their proposed reforms, nor set out the intended timescale for implementation.  Separately, they intend to freeze Corporation Tax at its current rate of 19% (abolishing prior plans to reduce it to 17%).  On the other hand, the R&D Tax Credit rate is to increase to 13%.  In what they call a “triple tax lock”, they promise not to increase VAT, Income Tax or National Insurance during the Parliament.  In fact, they propose to increase the NI threshold to £9,500, with plans to ensure that the first £12,500 of earnings is completely tax-free (though with no timetable for that move).

NEXT STEPS

In my last update, I reflected that changes to the prevailing tax regime would be unsettling for business owners.  But such changes are an inevitable part of the election process.  I advised that affected business owners – especially those looking to dispose of their businesses in the near future – should seek tax advice as soon as possible.  That advice still holds good.

Calls to Abolish CGT Entrepreneurs Relief – Should Business Owners Be Worried?

Related latest updates
PREV NEXT

Arrow Back to Insights

Shorter Reads

General Election: party manifestos confirm coming CGT Entrepreneurs Relief changes

Published 24 November 2019

Associated sectors / services

  • Private Wealth
  • Tax & Estate Planning
  • Trusts

Authors

All parties have now published their election manifestos.  Each contains proposals which would affect business owners and entrepreneurs.

I previously predicted that altering or abolishing CGT Entrepreneurs Relief would be fairly low-risk for an incoming Chancellor of the Exchequer.  It seems that is coming to pass.

This update briefly summarises the key proposals of the UK’s three main nationwide parties relating to entrepreneurs and business owners.

LIBERAL DEMOCRATS

The Liberal Democrats have least to say about Entrepreneurs Relief, not directly mentioning it at all.  Relevantly, they would abolish the CGT annual exemption (currently worth £12,000).  They would also introduce a new General Anti-Avoidance rule (presumably in place of the current General Anti-Abuse Rule) and increase Corporation Tax to 20%.

LABOUR

Labour’s manifesto contains a great many tax proposals.  Taxpayers earning more than £80,000 a year are warned that they will face higher taxes overall.  The headline rate of Corporation Tax would increase to 26% by 6 April 2023.  Meanwhile, CGT rates would be harmonised with Income Tax and Entrepreneurs Relief would be abolished outright and Labour would “consult on a better form of support for entrepreneurs which is not largely just a handout for a small number of people.”

CONSERVATIVES

The Conservatives comment that “some [tax] measures haven’t fully delivered on their objectives” and, as a result, they propose to “review and reform Entrepreneur’s Relief.”  They have not yet brought forward details of their proposed reforms, nor set out the intended timescale for implementation.  Separately, they intend to freeze Corporation Tax at its current rate of 19% (abolishing prior plans to reduce it to 17%).  On the other hand, the R&D Tax Credit rate is to increase to 13%.  In what they call a “triple tax lock”, they promise not to increase VAT, Income Tax or National Insurance during the Parliament.  In fact, they propose to increase the NI threshold to £9,500, with plans to ensure that the first £12,500 of earnings is completely tax-free (though with no timetable for that move).

NEXT STEPS

In my last update, I reflected that changes to the prevailing tax regime would be unsettling for business owners.  But such changes are an inevitable part of the election process.  I advised that affected business owners – especially those looking to dispose of their businesses in the near future – should seek tax advice as soon as possible.  That advice still holds good.

Calls to Abolish CGT Entrepreneurs Relief – Should Business Owners Be Worried?

Associated sectors / services

  • Private Wealth
  • Tax & Estate Planning
  • Trusts

Authors

Need some more information? Make an enquiry below.

    Subscribe

    Please add your details and your areas of interest below

    Specialist sectors:

    Legal services:

    Other information:

    Jurisdictions of interest to you (other than UK):



    Article contributor

    Enjoy reading our articles? why not subscribe to notifications so you’ll never miss one?

    Subscribe to our articles

    Message us on WhatsApp (calling not available)

    Please note that Collyer Bristow provides this service during office hours for general information and enquiries only and that no legal or other professional advice will be provided over the WhatsApp platform. Please also note that if you choose to use this platform your personal data is likely to be processed outside the UK and EEA, including in the US. Appropriate legal or other professional opinion should be taken before taking or omitting to take any action in respect of any specific problem. Collyer Bristow LLP accepts no liability for any loss or damage which may arise from reliance on information provided. All information will be deleted immediately upon completion of a conversation.

    I accept Close

    Close
    Scroll up

    Find out about Business

    Find out about Dispute Resolution

    Find out about Individuals & Families

    Find out about Real Estate

    We are Collyer Bristow - The law firm for those that
    value individuality, creativity and collaboration.

    Legal & Pricing info Regulatory InformationAccessibilitySitemapPricing and service information

    Listen to our latest podcast: Budget Miniseries: Impacts on Families with US Connections (Part 1)

    Listen to our latest podcast: Cracking the Code on Directors’ Service Agreements

    Read our latest article: Economist, or just economical with the truth? How can employers respond to ‘fake claims’ on a CV?

    Listen to our latest podcast: Autumn Budget 2024 Special (Part 2)

    Read our latest article: ‘Promoting the integrity of the register’: The new Companies House approach to non-compliance

    ExpandNeed some help?Toggle

    < Back to menu

    I have an issue and need your help

    Scroll to see our A-Z list of expertise

    Get in touch

    Get in touch using our form below.



      Business Close
      Private Wealth Close
      Hot Topics Close