Entrepreneurs need to be supported in the Chancellor’s Budget

Ahead of next week’s Budget, Julia Rosenbloom, tax partner in Smith & Williamson’s Birmingham office, outlines in an open letter to the Chancellor of the Exchequer, Rishi Sunak, five areas of tax that she believes should remain unchanged in order to best support entrepreneurs...

Dear Chancellor,

Entrepreneurs and business owners up and down the country are the lifeblood of our economy and need to be supported. They help bring economic growth, invest in local communities and create jobs. Many have faced significant challenges during the pandemic when they were forced to shut during lockdowns and some consequently took financial hits to their businesses:

As you put the final touches to your upcoming Budget, I ask that you consider the five areas of tax closely in order to best support entrepreneurs and business owners:

1. Please don’t make significant changes to Business Property Relief (BPR) and Agricultural Property Relief (APR) on inheritance tax (IHT). Business owners rely on these reliefs to support the continuity of their businesses and this enables those business to continue providing employment in their local communities.
2. Please don’t abolish Inheritance Tax Potentially Exempt Transfers (PETs) - which allow an individual to make gifts of unlimited value and become exempt if the donor survives for a period of seven years. On a related subject, please don’t make changes to the way Family Investment Companies or trusts are treated. Family Investment Companies and trusts allow the donor to retain control over the assets they give away, which can be particularly important where the recipient is financially inexperienced, vulnerable etc.
3. Please don’t increase capital gains tax (CGT) because if it gets too close to income rates then there will be less of an incentive for entrepreneurs to take the risks we need for a healthy, growing economy.
4. Please don’t align National Insurance Contributions (NIC) for the self-employed with employee rates. Many self-employed have already had a tough time during the pandemic and have not been able to access support schemes like furlough to the same extent as employed individuals. Any further changes here could make some businesses unviable.
5. Please don’t make any more tax changes targeted at property investors. As an asset class, property (especially residential) is already singled out for special disadvantageous tax treatment, even where people have multiple properties and run them as a business. We need people to keep investing in property so that tenants don’t find themselves kicked out on the streets and/or struggling to find rental properties.

Yours sincerely



Julia Rosenbloom LLB CTA TEP
Tax Partner
Spear’s Top Recommended Tax & Trust Accountant 2021
Smith & Williamson