Ian Dickinson, tax director at UHY Hacker Young in Nottingham said: “This year’s budget saw a shift in emphasis aiming to deliver for everyone, rather than focusing on one specific agenda or sector. This agenda comes after a time of political uncertainty and during a healthcare crisis too – meaning all eyes were on Rishi Sunak to deliver. With this being said, lots of promises were made and actions put in place, more so than we’ve seen in recent years – but has it been well thought out, with all potential loopholes well considered? Time will tell.
“For SMEs, whilst likely changes to Entrepreneur’s Relief were well trailed, the announced change was a bit of a kick in the teeth, with Mr Sunak reducing the lifetime limit from £10m to £1m – impacting people with deals in progress or planning to sell their businesses soon. The reduced tax rate, which has been in place since 2008, currently affords entrepreneurs a 50% cut in the rate of Capital Gains Tax they pay on the sale of their business, with Mr Sunak claiming the relief as it stands is: ‘expensive, ineffective and unfair’. There was a lot of discussion surrounding growth and borrowing to invest, but will this reformation really create an environment for our SMEs to grow? This significant tax hike is going to impact many of the business owners we work with who have been planning for their retirement and succession of their business to the next generation.”
“The loosening of pensions across the board was welcome news, with Sunak increasing the two tapered thresholds for pension tax relief by £90,000. This is welcome support to many of the UK’s doctors, who are much needed during this current healthcare crisis. Overall, coronavirus was top of the agenda, with many temporary measures from increased statutory sick pay to business rates being suspended helping the economy and business owners in the short term. However, initiatives such as helplines to being able to self-isolate via 111 are positive but could easily be abused or poorly monitored.”
