The Resolution Foundation has recently called to scrap tax relief for entrepreneurs to fund the Government’s NHS spending plans.
The Resolution Foundation has claimed that the extra £2.7b a year generated in capital gains tax would go towards the Government’s £20bn NHS spending plan. It says that there is a rise of sole directors who benefit from the scheme, as well as couples who put company assets into both parties’ names to gain tax relief of up to £2m.
However, Luke Davies, CEO, and Founder of IW Capital, a specialist EIS SME investment firm, calls the claims ‘short-sighted.’
Luke is of the opinion that: “We need to think about what this tax relief does to the wider economy, and not just the individual tax relief, which adds up to £2.7b. Within the report, the Resolution Foundation even states that, with limited information, they estimate that individuals are saving six-figure amounts on their tax bill. However, it does not account for where else this money goes, such as investing to pay employees, grow businesses, invest in training, invest in the local economy, or open new sites.
Furthermore, I ask, where does it stop? If schemes like this are scrapped, do investment schemes, such as SEIS and EIS, go next? That will affect billions of pounds per year, stifling SME growth, sacrificing jobs, prospects, significantly affecting the national economy than the £2.7b tax relief for entrepreneurs. If plans like this are enacted, there will be catastrophic consequences for the UK’s economy.”
(Source: IW Capital)