Entrepreneurs Relief - urgent action required
Tax advisers and Insolvency Practitioners have been concerned for some time that Entrepreneurs' relief would be cut by the new Government. Boris Johnson has now stated openly that he is vehemently against this tax relief – which is commonly used as part of a solvent liquidation (MVL) process.
The Prime Minister has stated that the Treasury is "fulminating against" the tax break as some "staggeringly rich" people are using it to "make themselves even more staggeringly rich". Whilst that suggestion is far from our experience, it has been reported that in 2018 company owners and investors saved £2.4 billion on their tax bills due to Entrepreneurs' relief.
It now appears likely that this relief will be cut in the Chancellor’s budget on 11 March – very soon indeed. It must follow, therefore, that many shareholders will want to put their company into MVL before the relief is removed.
All accountants and other advisers need to know about this and to warn their clients; it is very important that anyone considering putting their company into solvent liquidation seeks advice from a licensed insolvency practitioner as soon as possible. Herron Fisher offers a free initial consultation to discuss the necessary steps.
Published January 20, 2020