The new face of Entrepreneurs’ Relief

7th October 2020

 

The Budget in March 2020 was largely dominated by the coronavirus pandemic. However, there were some other significant changes that, at the time, may not have drawn as much media attention as they would normally.

 

Entrepreneurs’ Relief or should I say, ‘Business Assets Disposals Relief’ (BADR), being one of the more significant changes.

 

Entrepreneurs’ Relief seems to have been on the government’s agenda for some time, and those of us in the accountancy and tax profession were anticipating some kind of change, some even thinking there may be a full withdrawal of the relief.

 

In actual fact, the March Budget announced that the £10 million lifetime limit for entrepreneurs’ relief (which allowed capital gains on the sale of business assets up to this value to be taxed at a lower rate of 10%), saw a huge reduction down to a lifetime limit of only £1 million.

 

More interestingly, the change was to take effect from the budget date, 11 March 2020, rather than from the start of the new tax year, presumably in an attempt to try and mitigate individuals selling up in the interim!

 

A number of anti-forestalling rules were also introduced to combat those who had, for example, entered into unconditional sales contracts prior to the budget in an attempt to preserve the right to the £10 million lifetime limit.

 

A final change to mention was the name of the relief, which is now known as Business Assets Disposal Relief. A somewhat unnecessary change and a bit of a mouthful!

 

More details of the anti-forestalling rules can be found here: https://www.gov.uk/government/publications/reduction-in-the-lifetime-limit-for-entrepreneurs-relief-technical-note/reduction-in-the-lifetime-limit-for-entrepreneurs-relief-technical-note#forestalling-arrangements-entered-into-before-11-march-2020-delayed-completion



 
Other items in Blogs
 
Stephen Malkin
21st January 2021 1-Mar-21: Are you ready for new VAT Domestic Reverse Charge rules for construction services?

VAT registered businesses working within the construction sector should be aware that new reverse charge VAT administration rules are being introduced wef 1 March 2021 (delayed from original October 2019 launch date). The Government announced in the 2018 Budget that they are trying to reduce missing trader fraud; where builders collect VAT from their customers…

Read More »

Richard Alecock
13th January 2021 Information on local business grants from West Suffolk Council

Find out the up-to-date information on local business grants from West Suffolk Council during the COVID-19 pandemic:   COVID-19 support for business – grants (westsuffolk.gov.uk)

Read More »

Jonathan Moore
8th January 2021 New lockdown grants to support businesses and protect jobs

On 5th January 2021 the Chancellor announced new one-off top up grants for retail, hospitality and leisure businesses worth up to £9,000 per property to help businesses through the new lockdown.   The one-off top-ups will be granted to closed businesses as follows:   £4,000 for businesses with a rateable value of £15,000 or under…

Read More »

Chris Kelly
8th January 2021 Wrongful Trading Liability Suspension – Renewed 26 November 2020

In March 2020 the Government temporarily suspended wrongful trading provisions until 30 September 2020.   The purpose of this measure had been to ensure that company directors could continue to operate during Covid-19 without worrying about becoming personally liable for wrongful trading.   On 26 November 2020, following the 2nd lock down, new legislation came…

Read More »

Jaimie King
4th January 2021 Coronavirus loan scheme deadline extended

On 17th December the government announced a further extension to the Coronavirus Business Interruption Scheme loans (CBILS) – meaning that businesses now have until 31st March 2021 (previously 31st January) to apply.   This welcome announcement means that more businesses will be able to enter the loan scheme, benefitting from the needed funds during these…

Read More »

Nick Edgley
18th December 2020 Don’t miss 31 January deadline for filing your Self-Assessment Tax Return

The New Year is approaching and so is the deadline for filing your Self-Assessment Tax return – January 31, 2021.  Our tax experts can ensure everything is completed accurately and submitted on time.   If you need help or advice with your tax return or any other accounting or financial matters, please contact your local…

Read More »