The Chancellor seems to accept the view that Small and Medium
Enterprises (SMEs) are a key driver for helping to generate
economic recovery, as evidenced by announcements such as the
- The doubling of Capital Gains Tax (CGT) "entrepreneurial
relief" to £2m from 6 April 2010, effectively providing
entrepreneurs with a 10% CGT rate on the first £2m of gain
when selling their businesses
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- The doubling of the Annual Investment Allowance (100%
relief) to £100,000 for plant / machinery used in a business
from April 2010.
Whilst these are welcome measures, entrepreneurs will still
be dismayed by other areas that need urgent attention if we
really want to have an SME led recovery. Examples include:
- The significant regulatory burdens on businesses -
smaller businesses simply do not have the resources to cope
with ever-increasing regulation such as administering the
government's various tax credit schemes.
- The significant Inheritance Tax Liabilities that can
arise when entrepreneurs seek to pass on their hard earned
(and taxed) wealth to their families - made worse by the
announcement that the thresholds will be frozen for the next
- The significant reduction in recent years of schemes
that allow entrepreneurs to raise equity risk capital, e.g.
under the Enterprise Investment Scheme or Venture Capital
So while the news in some areas was welcomed (or not as bad
as feared!), there are still a number of areas to work on.