In the hunt for extra revenue, one tax relief that the Chancellor (whomever is successful) is bound to look at closely is Entrepreneurs’ Relief. How can the tri group help with solvent liquidations before its too late?
On the run-up to next month’s election, the political parties seem to be indulging less in a battle of ideas about a vision for our country than in a spree of competitive spending pledges. They’re being far more cagey, of course, about how they intend to pay for all this largesse.
Once the election is done and dusted it’s the Chancellor who will need to confront that problem, and work out where the money’s coming from. In the absence of the mythical magic money tree, it’s a fair bet that it will be your pocket and mine, no doubt with as much stealth as he can manage.
In the hunt for extra revenue, one tax relief that he is bound to look at closely is Entrepreneurs’ Relief. It would be a low-hanging fruit, unlikely to generate much adverse publicity for whichever government occupies Downing Street. The Institute for Fiscal Studies (IFS) has recently proposed scrapping the relief, arguing that they could find little evidence that it encouraged investment. They argue that business owners respond to changes in taxation more by adjusting how and when they take money out of their company, than by changing the amount they take or how much they invest.
This proposal from the IFS is not new and the IFS is not alone. There have been calls over several years from various think tanks and commentators for the abolition of the relief.
Why is Entrepreneurs’ Relief good for business?
We would argue that the purpose of Entrepreneurs’ Relief is to reward entrepreneurship and risk-taking rather than to stimulate investment.
So for anyone thinking about disposing of a business, be it for:
• personal health reasons
• a wish to reduce stress
• ever-increasing regulation
• uncertain future business risks
or any other reason, or perhaps just thinking of moving on to something new, then now would seem the ideal time to act.
In order to obtain Entrepreneurs’ Relief it is necessary to place the company into members’ voluntary liquidation (solvent liquidation). The Team at tri group has considerable experience in winding up companies through such procedures, working to tight deadlines where necessary to maximise tax benefits. Whilst we are not prepared to indulge in the game of advertising ludicrously low prices to obtain instructions only to find ways of increasing them through terms cunningly concealed in the small print, we are very happy to agree fees in advance on a case by case basis.
If you would like to discuss using a solvent liquidation to release cash or other assets to shareholders in a tax-efficient way, please contact a member of the tri group team.
To learn more about Entrepreneurs’ Relief please read our blog – What Is Entrepreneurs Relief?
Do you have any questions?
Call us on 0330 1000 371
If you have questions about Entrepreneurs’ Relief, we are here to help you understand your financial options, just contact our offices. We’re available Monday to Friday, from 09:30-17:00 to take your call in confidence.
‘We emphasise that tri group are not tax advisers and so you should take advice from an accountant or another specialist to understand if Entrepreneurs’ Relief is available to you. Our experienced Team of insolvency professionals provides clear, straightforward and confidential solvency and insolvency advice tailored to the individual needs of our clients. We work throughout England and Wales, and initial consultations are complimentary.’