Press Release
Too little, too late, too few
Finally after all this waiting we know what The Chancellor's proposals are for the new capital gains tax (CGT) regime. Broadly the 18% flat rate remains but there is a concession for smaller businesses. There will be a new lifetime limit relief for people selling small businesses and any directors or employees of a qualifying company who own 5% or more of the shares. The relief will permit people to pay CGT at 10% on the first £1 million of gain. Gains in excess of this will be taxable at 18%. All other gains will be taxable at 18% as per the PBR proposals.
Commenting on the announcement, Andrew Jupp, National Head of Tax at Tenon, said "Whilst any changes to the draconian changes announced in the Pre-Budget Report are welcome, what Mr Darling has said today fails to meet the real concerns we have been voicing for months. There is nothing to relieve the tax burden on the highly-successful entrepreneurs who have created great businesses; nor is there any encouragement to the serial entrepreneurs who invest time and time again and are the lifeblood of the UK's entrepreneurial culture. It's simply too little, too late, and benefits far fewer people than we have been campaigning for. And what about all those employees who have shares or options in their employing companies; very few of these will own 5% of the company? They still do not benefit from the changes".
The changes, which come into effect on 6 April, give businesses, investors, and their advisers less than 10 weeks to prepare. Jupp continues, "We have already seen a number of people getting out of their business early to "bank" the 10% CGT rate; we are likely to see a further flurry of activity in the next couple of months".
Commenting on the detail of the changes, Andrew Hubbard, Tenon's National Tax Technical Director said, "As always, the devil will be in the detail. It will take some time to absorb the changes, and we will need to advise clients based on incomplete information and no firm legislation. The situation is far from ideal; how can we be sure that there won't be yet more changes before the legislation becomes law?"
Ends.
Andrew Jupp is available for comment on 07800 617 479
Andrew Hubbard is available for comment on 07800 617 108
For more information, please contact:
Eleanor Cummings - 07972004142 or eleanor.cummings
Notes to editors
About Tenon
Tenon is a leading provider of accounting and business advice to entrepreneurs, providing clients with expertise in Business Services, Tax, Financial Services, Corporate Finance, Recovery, Outsourcing and Forensic Accountancy. Tenon is the 9th largest UK accountancy firm with over 1900 staff UK wide and a turnover of £137.1m. Operating through a network of 47 offices, Tenon is able to offer local expertise but with the backing of a national plc.
In 2007, Tenon sponsored a new award category at the National Business Awards - The Tenon Award for Entrepreneurial Spirit.
To learn more about the awards and Tenon's category visit
www.tenongroup.com/nba or www.nationalbusinessawards.com
