Hyde House
Business Broking & Consulting
Capital Gains Tax
CAPITAL GAINS TAX, MAJOR EVENTS, BUSINESS RECOMMENDATIONS
Update 31/01/2008 - Alistair Darling has confirmed a flat rate of 18 per cent capital gains tax will be introduced on April 6 but has offered concessions to small business owners.
Under the revised proposal announced today small business owners will only have to pay 10 per cent tax on any profits they make up to a cumulative limit of £1m. Any profits beyond this will be taxed at the higher rate of 18 per cent.
Darling proposed in October's pre-Budget report to scrap the lower 10 per cent CGT rate and replace it with an 18 per cent flat rate which spurred months of lobbying from business groups and small firms claiming it stifled entrepreneurialism.
Update 01/12/2007 -The Chancellor’s pre-budget raid on entrepreneurs is expected to create a rush of sellers in the SME sector fuelled by the desire to save tax.
See our capital gains tax Podcast for the latest information.
The Labour Government seems to have reverted to a socialist agenda by attacking business builders (those people who take risks and employ people paying VAT and Corporation tax along the way) in a supposed strategy to peg back the earnings of bosses running private equity firms. The ‘sledge- hammer-to-crack-a-nut’ changes to capital gains tax means that all are subject to an 18% tax rate on exit. Previously, after application of taper relief the effective rate became 10% for most businesses.
It appears that in future the Government will no longer support ‘enterprise’ with tax incentives effectively rewarding risk and hard work but instead is prepared to plunder a soft target. SMEs are the lifeblood of this country but perhaps the hurdles to joining the entrepreneurial world have now been made harder to jump as the risk reward equation is skewed in favour of risk rather than reward.
However, if you own a business and were or are now thinking about selling, it is not too late to benefit from the current 10% CGT tax rate. To start the sales process now and compete by March 2008... Contact HHCBS now