KPMG Private Enterprise Tax Partner, David Bywater comments on the Entrepreneurs’ relief reducing the lifetime allowance.
Following the news that Entrepreneurs’ Relief has been reviewed to reduce the £10 million lifetime allowance to £1 million, David Bywater, KPMG Private Enterprise Tax Partner, said:
“Investors and businesses owners will be somewhat relieved that today’s announcement did not go as far as many had suggested in completely abolishing Entrepreneurs’ Relief. This incentive has been under the microscope for a while following concerns that it is costing far more than was originally anticipated and didn’t entirely deliver on its objective to act as an catalyst for investment in and growth of entrepreneurial businesses. The tax relief costs the UK over £2bn a year and with the Chancellor tasked to find the money to help the Government deliver on its promise to level up regional inequality it was in the firing line as an expensive initiative that benefitted the few and could help the many.
“Entrepreneurs’ Relief is one of several incentives for startup and fast growth businesses, and this announcement should help businesses to plan their long-term investment strategies whilst reassuring investors and innovators that the UK remains open and supportive of new businesses.”
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