MoorcroftsMoorcroftsMoorcroftsMoorcrofts
Menu
  • Services
  • Team
  • Careers
  • Charity
  • Insights
    • News
    • Events
    • Podcasts
    • Case Studies
  • Contact

Entrepreneurs’ Relief Remains, Just.

Entrepreneurs' Relief

Entrepreneurs’ Relief Remains, Just.

11th March 2020

Share this post

Rishni Sunak, the Chancellor, today announced a number of measures, he says, to support the UK economy both long term and in light of the Coronavirus outbreak. However, what industry advisers were keeping their eyes on, was the announcement of any changes to Entrepreneurs’ Relief.

Entrepeneurs’ Relief is a tax break which entitles business owners to relief on the capital gains due on the sale of their business taking the tax rate from 20% down to 10%. Prior to the budget, each person had a lifetime limit of £10million to claim relief on the capital gains  made in such a business, so long as they had complied with certain criteria as to ownership and employment with said business.

The relief was originally intended to encourage people to set up their own business. However, many, including Boris Johnson, have criticised the relief of late, with the Prime Minister telling a group of female entrepreneurs in January: “I have to tell you, the Treasury is fulminating against it because there are some people who are staggeringly rich who are using that relief to make themselves even more staggeringly rich,”.

Over the past few months, there have been calls on the government to abolish Entrepreneurs’ Relief altogether. IFS economist, Stuart Adam opined “I’d be delighted to see it removed altogether if possible” and the Resolution Foundation has stated that the scheme is “expensive, regressive and infective” with the cost to the Treasury being estimated between £2bn and £3bn a year.

It was announced today that each individual’s lifetime limit of relief shall be reduced from £10m to £1m. This would save £6bn over five years. Rishni Sunak said he had listened to those wishing to abolish the relief, but stated that entrepreneurial risk-taking should be supported. Mr Sunak stated that some 80% of small business would be unaffected from the changes made in today’s budget.

The Chancellor has stated that by making such changes, the money saved will allow the government to cut other business taxes, with the announcement that business rates will be suspended for certain small businesses.

The upshot is that those owner managers wishing to sell their business can still take advantage of the lower 10% capital gains tax rate on the first £1million gain as a reward for investing or taking a risk to start up or run a business.

Please contact the Moorcrofts corporate team, if you would like further information regarding company sales.

Related Post

14TH OCTOBER 2025

Environmental sustainability and performance of commercial...

The Minimum Energy Efficiency Standards (MEES) were introduced on 1 April 2018 to improve the energy performance of commercial buildings, which account for around 20% of the UK’s carbon emissions. With the Government’s target of net...

3RD OCTOBER 2025

Moorcrofts retains top-tier rankings as a leading law firm...

Leading law firm Moorcrofts continues to be recognised for its strong performance in the Legal 500 UK 2026 rankings. The firm has maintained its position as a Tier 1 powerhouse for Corporate and Commercial services in the South East...

Recent Posts

  • Environmental sustainability and performance of commercial premises

    14th October 2025
  • Moorcrofts retains top-tier rankings as a leading law firm in the south east

    3rd October 2025
  • Are you clear on the interpretation of gender reassignment rights under the Equality Act?

    18th September 2025

Get in touch

team@moorcrofts.com
T. +44 (0) 1628 470000
F. +44 (0) 1628 470001
LinkedIn Twitter

Find us

Thames House
Mere Park
Dedmere Road
Marlow
Bucks
SL7 1PB
Moorcrofts LLP is a limited liability partnership registered in England and Wales under number OC311818. Partners: Theresa Hunter, Barry Maytum, Joe Hughes, Julia Ferguson, Kate Prentis, Lindsey Abbott, Tim Astley and William Pearce. Authorised and regulated by the Solicitors Regulation Authority (number 419658) VAT no. GB 727298404

The term "Partner" is used to refer to a member of Moorcrofts LLP or a person of equivalent status, qualifications or senior management experience.

Privacy and cookies  | Service and price transparency  | Complaints

© 2024 Moorcrofts LLP, All Rights Reserved.

This website uses cookies to personalise your experience. For more information on how this site uses cookies please view our Privacy policy