A recent survey has found that the vast majority of businesses in the UK would accept a tax rise in exchange for a simpler and less cumbersome tax system, with only 12 per cent of those polled saying they did not find the business tax system too complex.
According to the survey, 66 per cent of businesses indicated they would accept a rise in taxes in exchange for a simplification programme, a rise of 18 per cent since the 2018 budget.
New Chancellor Rishi Sunak is expected to increase spending and cut entrepreneurs’ tax relief, a tax rise equivalent to £2.7 billion a year, in his first Budget next week.
The tax hike is in a bid to boost infrastructure spending and building projects in the North of England and the Midlands, despite facing a backlash from fellow members of the Conservative party over his decision to scrap the relief.
Entrepreneurs’ tax relief is a tax break which halves the capital gains tax paid when people sell their businesses. Under current rules, sellers pay only 10 per cent on lifetime gains of up to £10 million, compared with the 20 per cent capital gains tax paid by higher-rate taxpayers.
A group of 150 business owners wrote to Mr Sunak recently urging him to retain the tax break.
The signatories, who include former trade minister Lord Jones, claim that other entrepreneurs have sold their business and are currently considering whether to start a new business in the UK or not, with one pointing out that there is at least one entrepreneur who will start his next business in Singapore if entrepreneurs’ relief is not available to him.
Rob Chedzoy, Tax Partner at Milsted Langdon, said: “The research indicates that there is an appetite for a change in the tax system, and with changes to entrepreneur’s relief believed to be in the pipeline for the upcoming Budget, there could be more significant changes on the way.
“For help and advice on matters relating to business tax, contact our expert team at Milsted Langdon today.”