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

8TH JULY 2025

Moorcrofts steps out for the 2025 Reading Legal Walk

On Tuesday 16 September a 13-strong Moorcrofts team will lace up their trainers and join hundreds of lawyers, judges and advice sector supporters for the Reading Legal Walk 2025, a sponsored 10 km route that raises vital funds for local...

7TH JULY 2025

Employment Law: What is changing and when

The Employment Rights Bill is due to bring some significant changes to UK employment law. The government have now released their Roadmap setting out when we can expect those changes to take effect. The changes, and when they are due to...

Recent Posts

  • Moorcrofts steps out for the 2025 Reading Legal Walk

    8th July 2025
  • Employment Law: What is changing and when

    7th July 2025
  • Unfair Dismissal to become a Day One Right: You need to prepare now

    7th July 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