SMEs say scrapping entrepreneurs’ relief will destroy retirements

There are reports that the Chancellor may scrap, not reform, entrepreneurs’ relief at the upcoming Budget – this is despite the Conservative manifesto pledging to “review and reform” the incentive.

FSB National Chairman Mike Cherry, commented on these reports, “Scrapping entrepreneurs’ relief would make a mockery of the idea that it’s ever sensible to build up a business rather than investing in property, land or securing a gold-plated pension. Everyday entrepreneurs throughout the country who are about to retire will be left permanently poorer by this change.

“Only around ten per cent of people who claim this relief are selling businesses worth more than £1 million. The vast majority of those who benefit from this incentive – 38,000 each year – are everyday entrepreneurs, those who see their business as their retirement plan, and who would lose an average of £15,000 each as a result of this change.

He added, “This move would mark an incredibly damaging way of telling anyone thinking of investing in their business not to bother.

“The Conservative Party made a clear commitment to reform – not scrap – this relief in its general election manifesto. They should keep to their word. Sensible reform would involve refocusing entrepreneurs’ relief so that it only applies to the first £1 million of business sales. Doing so would protect the vast majority of those who benefit from this incentive each year.”

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