While the UK tax budget has raised important questions about supporting entrepreneurs, successful business owners often face tax scrutiny. Meanwhile, the reality that most new ventures don’t survive past five years underscoring the need for reliable support and resources. Current incentives, like 'Entrepreneurs' Relief' and the 20% Capital Gains Tax (CGT), allow entrepreneurs to pursue their ambitions despite the risks involved. Without these supports, many may lean towards the stability of traditional employment, potentially limiting the innovation that fuels the UK economy.
Supporting a business’s operational foundation is essential for growth and focus, and reliable partners play a crucial role in helping businesses operate smoothly.
Pareto Founder and Vice Chair Andrew Hulbert shared these comments as part of an interview with the Lloyds British Excellence Awards.
'It’s easy to focus on successful entrepreneurs who achieve significant gains through the sale of their businesses, making them targets for tax increases. However, we often overlook those who take risks without achieving the same level of success. Currently, about 90% of new businesses fail within the first five years. It’s crucial for the UK economy that we continue to encourage entrepreneurs to take risks, even if they don’t always succeed, as this is essential for driving innovation and economic progress.
At present, there are few incentives for entrepreneurs, with 'Entrepreneurs' Relief' and the 20% Capital Gains Tax (CGT) being the primary supports available. These measures allow entrepreneurs to pursue ambitious goals and take necessary risks, making it feasible for them to strive for success even in the face of potential failure. Without these incentives, we risk discouraging individuals from starting their own ventures.
If we were to eliminate 'Entrepreneurs' Relief' and raise CGT to levels comparable to income tax, many entrepreneurs might choose the security of traditional employment, which offers steady income and growth. However, the true potential of entrepreneurs lies in their willingness to embrace risk and tackle challenges head-on.
The passion and drive needed to grow a business are at the core of entrepreneurship, and these individuals can only pursue their ambitions due to the existing tax benefits. To sustain robust economic growth and foster a new generation of talented entrepreneurs in the UK, we must explore ways to support entrepreneurship and encourage more individuals to start their own businesses. Personally, I have benefited from these schemes, and without them, my journey would not have been possible. They are effective and crucial for our economic landscape.'
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