Tax clampdown to bring in £1.5bn
30 Jun 2017
The Government is set to bring in an extra £1.5bn in tax from small business owners this year, according to recent research. The extra income follows a clampdown on Entrepreneurs' Relief, which is now significantly more difficult to claim, following changes in the 2015 Budget which restricted the types of people and businesses that are eligible for it.
According to the findings, HMRC projections suggest only £2 billion of Entrepreneurs' Relief will be successfully claimed against CGT bills this year, down from £3.5 billion in each of the past two years.
Entrepreneurs' Relief: Eligibility
You may be able to pay less Capital Gains Tax when you sell (or ‘dispose of’) all or part of your business. Entrepreneurs’ Relief means you’ll pay tax at 10 per cent on all gains on qualifying assets.
You’ll qualify if you dispose of any of the following:
- all or part of your business as a sole trader or business partner - including the business’s assets after it closed
- shares or securities in a trading company where you have at least 5% of the voting shares and where you have been an officer or employee for at least 12 months.
- shares you got through at Enterprise Management Incentive (EMI) scheme after 5 April 2013
- assets you lent to your business or personal company
You may also qualify if you’re a trustee selling assets held in the trust.