Accountants based in Sidcup, UK

IFS calls for Entrepreneurs' Relief to be scrapped

23 Oct 2019

The Institute for Fiscal Studies (IFS) has called for Entrepreneurs' Relief (ER) to be scrapped.

In a new report, the IFS stated that owner-managers 'respond to changes in income taxes by adjusting how and when they take money out of their company', not by changing the amount of income they create or how much investment they make.

According to the IFS, lower rates of tax on business income produce 'large benefits that disproportionately accrue to the rich'.

The business group also suggested that ER costs the government £2.4 billion per year relative to taxing gains at the full capital gains tax (CGT) rate.

Commenting on the matter, Phil Hall, Head of Public Affairs and Public Policy at the Association of Accounting Technicians, said that ER is 'extremely expensive, misguided and ultimately ineffective'. He continued: 'If the government is serious about wanting to encourage entrepreneurialism, committing this £3 billion of relief to help small British businesses to grow and prosper would be a far better investment for UK plc than encouraging business owners to sell up.'

The report can be read in full here.

Try a site search Tax return, dividends, pension, audit...

Company details

0208 3002307

Opass Billings Wilson & Honey LLP, Numeric House, 98 Station Road, Sidcup, Kent DA15 7BY
About us

Led by a management team qualified and experienced in our business disciplines, and assisted by technical and administrative personnel, we offer a wide range of business, tax and advisory services.

Read more

© 2024 Opass Billings Wilson & Honey LLP. All rights reserved. We use cookies on this website, you can find more information about cookies here.
Registered in England. Partnership No. OC341377. Registered office address as above.