Tax

New CGT rise to hit SMEs hardest

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Tax
Written by Tim Ashley Sparks, Managing Director, Bartercard UK   
Monday, 28 June 2010

Another blow for British business say Bartercard UK.

 

A significant rise in Capital Gains Tax (CGT) and the abolition of taper relief are cause for concern to the entrepreneurs and small and medium sized enterprises hit hardest by recession. The coalition government tax hike rise will worsen the risk/reward balance for new and existing businesses and those who invest in them.

A rise in CGT will act as a disincentive to launch, invest in, or even continue to run many good businesses at a time when they most need support.SMEs have been hit hardest by the recession while countless billions of pounds have been spent propping up the financial institutions which caused the financial crisis, while failing to supply credit which businesses so badly need.

Bartercard, the world’s largest non-cash trade exchange, provides a real solution for companies looking to reduce costs, generate new revenue streams and secure a line of credit. Bartercard’s trade pounds are a powerful business tool and viable alternative currency which allows members to trade and grow without the need to spend valuable cash.

The SME sector is the lifeblood of the British economy. It accounts for over 60% of domestic GDP, yet its innovation and enterprise, which should be highly-prized, are constantly under threat. A rise in CGT represents another blow for British business. It could mean that entrepreneurs find themselves in the ludicrous position that having taken considerable personal risks to establish their business, create jobs and pay a high percentage of revenue in various taxes along the way, they are then faced with a heavy  tax bill upon exit.

These entrepreneurs are more likely than any other sector of society to convert capital from the sale of a business in to more wealth generation opportunities; yet we are in danger of taxing them and the country out of prosperity. The fact that Government is being deliberately vague on details of further cuts is causing uncertainty which is undoubtedly impacting on British business.

Bartercard has done what it can to nurture small businesses by reducing its membership fees and offering an interest-free line of credit, even for those businesses considered too risky by the major financial institutions. We’ve also put quarterly reviews in place to increase credit when appropriate.
 

 
 
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