Think tank urges government to abolish Entrepreneurs' Relief

Think tank the Resolution Foundation has dubbed Entrepreneurs' Relief (ER) the UK's 'worst tax break', and has urged the government to abolish the initiative altogether.

30 Aug 2018

Think tank the Resolution Foundation has dubbed Entrepreneurs’ Relief (ER) the UK’s ‘worst tax break’, and has urged the government to abolish the initiative altogether.

ER is a tax relief available on the disposal of a business, and gives those eligible access to a lower rate of capital gains tax (CGT): under ER, this is charged at 10%, as opposed to 20%.

According to the Resolution Foundation, ER is ‘ineffective’, and should therefore be abolished in order to fund improvements to NHS services.

When it was first introduced in 2008, ER was expected to cost £200 million per year. The Resolution Foundation stated that spending on the relief ‘ballooned’ to over £2 billion by 2011/12, due in part to ‘increased generosity’ and ‘greater-than-expected use’. HMRC recently predicted that ER spending increased to £2.7 billion last year.

The Foundation suggested that this figure is ‘more than the entire budget’ for the UK’s intelligence services, and is enough to ‘provide £100 to each and every household in the country annually’.

Adam Corlett, Senior Economic Analyst at the Resolution Foundation, said: ‘As the Treasury wrestles with how to raise revenues to fund the Prime Minister’s pledge of £20 billion for the NHS, they should start by scrapping this expensive, regressive and ineffective tax relief.’

Sheards are cloud accounting experts

qb sage xero freeagent kashflow

Home | Contact us | Accessibility | Disclaimer | Help | Site map | SeptemberSeptemberjanuary

© 2024 Sheards Chartered Accountants. All rights reserved.

Sheards is the trading name of Sheards Accountancy Limited. Registered in England and Wales: Company no. 06837228. Regulated by the Institute of Chartered Accountants in England & Wales.

Registered to carry on audit work in the UK and regulated for a range of investment business activities by the Institute of Chartered Accountants in England & Wales.

The registered office is: Sheards Chartered Accountants, Vernon House, 40 New North Road, Huddersfield, West Yorkshire HD1 5LS
We use cookies on this website, you can find more information about cookies here.