The CIOT has warned that legislation implementing changes to schemes designed to promote investment in small and growing businesses could deter some investors from taking advantage of the reliefs.
The CIOT has warned that legislation implementing changes to schemes designed to promote investment in small and growing businesses could deter some investors from taking advantage of the reliefs. It is feared that the legislation will become more complex and deny relief in certain circumstances to existing investors wanting to increase their investments.
Andrew Gotch, chairman of the institute’s owner-managed business sub-committee, said: ‘A large number of qualifying conditions … can be off-putting to potential investors’ and ‘the professional advice and time needed to navigate the associated legislation can be disproportionate to the expected amount of tax relief.’
‘We are not sure why a growing manufacturing company, for example, should have a £15m cap while a “knowledge intensive” company, such as a one in the IT or biotech sector, might be able to qualify for £20m, whilst arguably both could bring benefits to the economy overall.’ He also pointed out that the definition of ‘business growth and development’ is problematic and ‘adds little to our understanding of what the new restriction is aiming at compared to the existing legislation.’
Similar concerns were also recently expressed by the ICAEW.
The CIOT has warned that legislation implementing changes to schemes designed to promote investment in small and growing businesses could deter some investors from taking advantage of the reliefs.
The CIOT has warned that legislation implementing changes to schemes designed to promote investment in small and growing businesses could deter some investors from taking advantage of the reliefs. It is feared that the legislation will become more complex and deny relief in certain circumstances to existing investors wanting to increase their investments.
Andrew Gotch, chairman of the institute’s owner-managed business sub-committee, said: ‘A large number of qualifying conditions … can be off-putting to potential investors’ and ‘the professional advice and time needed to navigate the associated legislation can be disproportionate to the expected amount of tax relief.’
‘We are not sure why a growing manufacturing company, for example, should have a £15m cap while a “knowledge intensive” company, such as a one in the IT or biotech sector, might be able to qualify for £20m, whilst arguably both could bring benefits to the economy overall.’ He also pointed out that the definition of ‘business growth and development’ is problematic and ‘adds little to our understanding of what the new restriction is aiming at compared to the existing legislation.’
Similar concerns were also recently expressed by the ICAEW.
