Business

42% of OMBs would support rise in CGT if it aided economic recovery

According to Tim Woodgates associate at Moore, more businesses are ‘pushing for a rise in CGT over other taxes, as a smaller cohort will be impacted by any increase’

Some 42% of owner managed businesses (OMBs) would support increases to Capital Gains Tax (CGT) in the March Budget to help the economy recover from lockdown, research from accountancy firm, Moore shows. 

Analysis conducted by the group also found that 75% of respondents are against any increases to VAT, whereas 66% and 62% would be opposed to increases in income tax and national insurance, respectively.

According to Tim Woodgates associate at Moore, more businesses are “pushing for a rise in CGT over other taxes, as a smaller cohort will be impacted by any increase”. 

In addition, the firm found that OMBs are hopeful that Sunak will announce measures on 3 March, to “stimulate investment”. This could include boosting R&D tax relief and the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme, which provides funding to UK SMEs.

Woodgates said: “The chancellor should be incentivising investors to provide funding for SMEs during these challenging times. Increasing tax relief available through schemes such as EIS will help businesses and investors alike.

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“There has been a stark difference in the way some businesses have been impacted Covid-19, with smaller businesses feeling the squeeze the most. With income levels yet to fully recover, the government should refrain from imposing tax increases to avoid putting these businesses under further financial strain.”

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