With a disastrous standing at the local elections, many Conservative MPs are mulling over the probability of being in a much smaller party, and in opposition after the general election, next year. Businesses right across the economy should be sure that they understand the implications of a Labour government to their business and their industry.A future Labour government has all but confirmed that it will commit to a review of business taxes and move away from what it calls an “11th hour approach”, which the party believes is currently holding back investment.
There is a simplistic logic doing the rounds in the Labour camp that dividend tax should be in line with general taxation rates, but ‘try at your peril’, there are many small businesses whose very existence would be at risk if they were taxed more on their dividend ‘income’. There is real fragility in this large group of business owners and the landscape would quickly change with many small businesses hanging up their boots rather than having to cope with yet another cash struggle.
We are likely to enter a phase of ‘big is beautiful’ in business and the shift towards larger companies will transform the landscape for decades to come. If you have any thoughts of retiring in the coming years, don’t wait around for these probable changes to control the narrative, think seriously about moving sooner rather than later. Labour may or may not be good for British business, but action now will certainly protect your retirement fund.
If you are considering selling your brokerage within the next five years, you should read on.
Business sales firms will tell you the biggest threat to our future is changing the taxation regime (and the loss of entrepreneur’s relief as was). However, there is one other major factor that you really need to focus in on when you’re looking at your future.
Sir Keir Starmer has already said that it is iniquitous that capital gains tax is a different rate to income tax, and I’m sure he will get round to increasing capital gains tax to 40% in line with income tax. However, this is not the main threat to your business. The biggest scare if labour is elected, as seems likely at this stage, is that all the Baby Boomer businesses out there having lived through previous labour governments are going to say enough. If they are within retirement distance, they’re going to try to sell the firms before the taxation regime changes and the penalise the rich attitude of labour start to bite. That being the case, there is likely to be a mass exodus of clients from their industries leaving you with a very much diminished client pool. This means that most businesses will be on the downturn if they try to sell, but more importantly, if they sell to a consolidator the 2 years buy out is likely to be adversely affected by the economic environment at that time.
Essentially, if you are considering retiring in the next five years, you need to speak to us now to see what the options are for ways in which you can protect your major investment i.e. your business.
Give us a call or email, it will potentially change your life.
