Speaking in advance of Chancellor of the Exchequer John Healey’s Budget speech on Wednesday 28 October, Anthony Andreasen, tax partner at Gosforth-based RMT Accountants & Business Advisors, which is part of the Sumer Group, said: “With this being the first Budget of the Burnham administration, there’s a great deal that could change, and with very few indications being given about what’s on the way, everyone is very much holding their breath.
“What we’re most hoping for from the Chancellor is certainty, so that businesses have firm foundations on which they can make their decisions and their advisors can help them plan for their futures without wondering what’s going to change out of the blue in a few months’ time.
“The significant increase in both the main rate of Capital Gains Tax and Business Asset Disposal Relief rate over the last two years has had a tangible impact on the M&A market, with any further CGT increase, as has been called for in some quarters, likely bring it to parity with income tax.
“This would likely result in long planned exits becoming a less attractive option for business owners, many of whom will have spent decades investing in and building up their companies and could have a negative impact in terms of their businesses’ long-term sustainability.
“The impact on farming businesses of the inheritance tax measures announced in the 2024 Budget has been made very clear, but what seems to be less well understood is that they apply equally to other owner managed trading companies.
“With it seeming unlikely that any further easing of these rules will be announced by the Chancellor, North East business owners should be urgently examining and acting on what the IHT tax regime means for them.”