Is Entrepreneurs’ relief about to be scrapped?

It was reported in The Times last weekend that we have had “the clearest sign yet” that Entrepreneurs’ relief is going to be scrapped by The Chancellor in his first budget in March. Boris Johnson apparently mentioned to a group of women entrepreneurs in his constituency that the Treasury is “fulminating” against Entrepreneurs’ relief as this makes “staggeringly rich” people “even more staggeringly rich”.

As a result of these comments, speculation is rife that Entrepreneurs’ relief will be abolished from 6 April 2020 or even from Budget day of 11 March 2020.

Entrepreneurs’ relief means you will pay tax at 10% on all gains from qualifying assets, such as the sale of all or part of a business or the sale or disposal of shares in your business. There are strict rules to ensure assets qualify for the relief.

If Entrepreneurs’ relief is scrapped, the tax rate on any gains from the sale or disposal of such assets will potentially increase to 20%.

If you are thinking about disposing of a qualifying asset, then it may be wise to investigate the options to do this sooner rather than later.  This may be especially relevant for contractors caught by the new “off payroll working rules” who are thinking about or are in the midst of winding up their companies.

Welcome Entrepreneurs’ relief change for shareholders

IR35 tax rules for individuals working via their own companies