Be under no illusion, a Jeremy Corbyn government is a great danger to UK business, and to the creation and preservation of wealth.
At Representation UK, we specialise in preparing and negotiating companies for sale, ensuring shareholders get the best terms they possibly can. But, what we have no control over, is the way governments choose to tax shareholders when a sale takes place.
Both the Leader of the Opposition and the Shadow Chancellor have talked about hiking tax rates for the well-paid. And there have been numerous threats about Labour equalising capital and income taxes. Indeed, these actions are increasingly being seen as ‘easy wins’ for a new left-wing government. That will be devastating for the UK’s enterprise economy and for the entrepreneurs who are responsible for so much of our nation’s wealth creation.
Currently, an entrepreneur putting everything on the line, can benefit from a 10 per cent tax charge on the sale of a company or business. If Entrepreneurs’ Relief is abolished (which is looking increasingly likely in a Corbyn-led government) we will see a huge increase in tax rates, even if the current top rate of tax is maintained. But, worryingly, it looks as though the Shadow Chancellor will be increasing the top rate further - much higher than the current 45 per cent top rate of tax.
Many entrepreneurs consider their pension to be the wealth they have created in their business, which is only to be taken when a sale occurs. Business owners should have a reasonable expectation that the government will treat them fairly when they sell. But that expectation is now at risk.
What should company and business owners do?
Well, many entrepreneurs are now beginning to gear up for a sale. It takes a lot of planning, and expert guidance. Unless there is an early election as a result of a no confidence vote in the current government, the next General Election is not due to be held until 2022. But don’t count on it lasting that long.
I am increasingly being asked how to prepare a company for sale and how long the process will take. The answer is, there is no time to waste. There is always a lot to do to get a business into shape, making it attractive for buyers. And, there isn’t a purchaser around every corner - sometimes they have to be hunted out.
But we can help; that is part of what we do. So, don’t put off the process of selling your business or your company, until it’s too late. At Representation UK, we can guide you through the process, helping you prevent a Corbyn election victory from decimating your personal, hard-earned wealth.
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