Business owners save approximately £2.4m a year via Entrepreneurs’ Relief (“ER”).
ER has led to business owners retaining reserves in their businesses to benefit from lower taxes. The Institute for Fiscal Studies (“IFS”) has found no evidence that “tax-motivated retention of profits translates into more investment in business capital”. The IFS have argued that ER is unfair as “it allows wealth to accrue disproportionately to those at the top of the very top of the income distribution”.
Last year the Chancellor resisted calls to scrap ER.
With a forthcoming Budget on 6 November 2019 and a possible general election, the clamour to restrict or remove ER is growing.
Providing the qualifying conditions are met, one way of obtaining ER is to place a company into a solvent liquidation or members’ voluntary liquidation (“MVL”). At Redman Nichols Butler, we deal with a large number of MVLs from £750 plus disbursements plus VAT.
If you or your clients are considering a MVL then act now before ER is potentially removed or restricted.
If you or your client want any further information on solvent liquidation then please contact us on T: 01377 257788 or T: 01724 230 060 or T: 01904 520 116.