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Entrepreneurs expect further rise in capital gains tax

Press enquiries to Sam Dabbs - 07711 672893

Nine out of ten entrepreneurs and advisers believe that the new 50 per cent top rate of income tax will fail to raise the additional revenue the government expects, according to preliminary results from a survey by Clearwater Corporate Finance.

Almost the same number – 89 per cent – feel the tax rise will prove counterproductive, by encouraging the use of tax avoidance schemes or discouraging inward investment.

The survey also revealed widespread concern about other tax rises. Almost all respondents – 96 per cent – believe that the government will raise capital gains tax next while 87 per cent of those who would be affected by such a move said it would cause them to think differently about their retirement or exit plans.

The new 50 per cent rate, which comes into force next April for those earning £150,000 or more, is part of a triple whammy for high earners who will also have tax relief on their pension contributions reduced and their personal allowances gradually withdrawn.

Clearwater partner Phil Burns says: “The new top rate is the highest level of income tax since the 1980s. Entrepreneurs and their advisers clearly feel that the tax rise will fail to achieve the desired results and the government will have to look for more tax rises.

“Once the new rate comes into force, entrepreneurs are likely to become disillusioned. Those who are planning to exit in the near future may well decide to sell up there and then rather than wait for the market to recover and risk being hit by a further rise in capital gains tax.”

The survey continues - to give your opinion, visit and click on ‘Take part in the survey’ at the bottom of the page.


Notes to Editors:

Clearwater Corporate Finance is the leading independent corporate finance house in the UK with an exceptional track record of over 300 completed transactions. We advise on all aspects of corporate finance transactions from mergers and acquisitions (M&As) and company sales to management buy-outs (MBOs). Our clients include management teams, owner-managers, private equity firms and large corporates.

We differentiate our service through our:

Independence – as we are not linked to any larger financial institution or consulting firm, we can provide objective advice without any potential conflict of interest.

Cross-border capability - the close communication between our four UK offices and the 60 member firms in IMAP, our exclusive partnership of international M&A firms, makes us a natural choice for cross-border transactions.

Sector expertise - our global sector teams offer clients a unique insight into M&A opportunities across the world.

Research and origination - with 25 per cent of staff focussed on these activities, we offer a market-leading capability to identify strategic opportunities for clients.

Excellence - we are committed to excellence in our service delivery and each client project is managed in a bespoke manner.

Commitment - as an owner-managed, partner-led firm, we guarantee a high level of partner involvement. We take a long-term view to build trust and lasting relationships.

The size of our team and the deals we advise on make us the most active independent corporate finance house in the markets in which we operate.

Press enquiries to:

Sam Dabbs
Dabbs PR & Marketing
T: 01939 210503 or 07711 672893