We asked insolvency practitioner Matt Hoy to share his thoughts on the potential for changes to Business Asset Disposal Relief, which has been a popular topic of conversation in recent months.

It is now 4 years since Entrepreneurs Relief was renamed as Business Asset Disposal Relief. At that time the limit for relief reduced rather significantly from £10m to £1m. There’s been talk ever since of it being scrapped completely.

With the Spring Budget next week (Wednesday 6^th March) could now be the time that the relief is removed? The scenario would open up a lot of questions… Is it a good idea to rock the boat so close to an election? Is it an opportunity for the Conservatives to win back some support? If it was removed does that alienate more voters than it wins?

With a General Election looming it may well be time for a change anyway, and Labour may well see this as an easy win. Presumably in their mind “taxing the wealthy”.

Working with small businesses we understand that is rarely the case. Those business owners have worked incredibly hard running their own business. They haven’t made huge profits, but they have built up some reserves in their business to help them in retirement. It doesn’t seem all that fair to have to part with a larger portion of that to the tax man. And there we have it, life is not fair!

If you are thinking of a solvent liquidation (Members Voluntary Liquidation) it might be worth doing it sooner rather than later, in case rumoured changes do come true. Some business owners I’ve spoken with recently have been keen to complete their MVL in this tax year for that reason. There’s a small window of opportunity but it is doable. If this update triggers that decision, pick up the phone today – call 0808 196 8676.