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Beware Bounce Back Bite Back?

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The UK’s first quarter figures for corporate insolvencies were almost 40% lower than the corresponding quarter for 2020. No surprise really, given the level of Government support to business these last 12 months. Part of this support has been in the form of the Bounce Back Loan Scheme [“BBL”] aimed specifically at the SME market whereby the Government has guaranteed 100% of the loan up to the maximum loan available of £50,000. The figures are truly astounding, with £46.6b of BBLs having been approved by 21 March 2021 and shared amongst over 1.5m qualifying claimants. There has been much speculation regarding fraudulent claims, particularly as the Office for Budget Responsibility has itself predicted a default rate of 40% on BBL and Coronavirus Business Interruption Loans.  In a classic case of closing the barn door after the horse has bolted, the Government is proposing new legislation to try and close a...
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Capital Gains Tax and the End of Entrepreneurs’ Relief

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Capital Gains Tax and the end of Entrepreneurs’ Relief? On the 14th of July this year, in the midst of the Coronavirus Pandemic, with Her Majesty’s Government helicoptering money throughout the United Kingdom, the Chancellor of the Exchequer decided that now was the time to order a review of Capital Gains Tax [CGT], to consider how gains are taxed compared with other types of income as it applies to individuals and small businesses. A burning issue, I think you will agree, in these unprecedented times. And who is to undertake this review? Why, the Office of Tax Simplification. And what is the OTS? Well, it terms itself as an “independent office of HM Treasury” [I think my old English Teacher would have referred to that as an oxymoron] which according to its website gives “independent advice to the government on simplifying the UK tax system, to make thing easier for...
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Entrepreneurs in the cross hairs

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25 November 2019: "Entrepreneurs in the cross hairs" 2019 UK Election Manifesto Commitments from the main parties to the UK Entrepreneur “Cross Hairs” noun a pair of fine wires crossing at right angles at the focus of an optical instrument or gunsight, for use in positioning, aiming, or measuring. Example: "I raised my rifle and got the deer in the cross hairs" “Entrepreneurs” noun persons who sets up a business or businesses, taking on financial risks in the hope of profit. Example: "I raised my rifle and saw many entrepreneurs in the cross hairs" “Entrepreneurs Relief” definition is a tax relief that reduces the amount of Capital Gains Tax when you dispose of shares in your business. It results in a tax rate of 10% [instead of 28% on other capital gains] on the value of the disposal and you can claim as many times as you like up to...
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Private sector off-payroll rules [IR35]

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The imminent death of the Personal Service Company [PSC]? Never mind the prospect [Certainty? Ed.] of a Corbyn led government in April 2020, a further and potentially far reaching erosion of entrepreneurism also occurs on that same date, with the introduction of the off-payroll rules [known as IR35] to the private sector. The Budget in 2018 announced that from April 2020 businesses in the private sector will become responsible for assessing an individual’s employment status and determining whether or not the off-payroll rules apply. In cases where the business does consider that such rules apply, like it or not, the individual who historically will most likely have operated via a PSC, will be deemed an employee. Goodbye dividends, hello PAYE and NICs! HMRC has long been concerned that individuals utilising PSCs pay less income tax and NICs then those employed directly. In April 2017 the off-payroll rules were applied to...
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