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August 2020

Capital Gains Tax and the end of Entrepreneurs’ Relief?

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Capital Gains Tax and the end of Entrepreneurs’ Relief? On the 14th of July this year, in the midst of the Coronavirus Pandemic, with Her Majesty’s Government helicoptering money throughout the United Kingdom, the Chancellor of the Exchequer decided that now was the time to order a review of Capital Gains Tax [CGT], to consider how gains are taxed compared with other types of income as it applies to individuals and small businesses. A burning issue, I think you will agree, in these unprecedented times. And who is to undertake this review? Why, the Office of Tax Simplification. And what is the OTS? Well, it terms itself as an “independent office of HM Treasury” [I think my old English Teacher would have referred to that as an oxymoron] which according to its website gives “independent advice to the government on simplifying the UK tax system, to make thing easier for taxpayers”. To make things easier for taxpayers, right, yes, so nothing to do with supplying ammunition to Mr Sunak to hammer those individuals who use their capital, ingenuity and hard work ethic to create wealth, to generate capital profit. Quiz Time- answers at the bottom of the page. And here is a not very generous clue- in the fiscal year 2018/2019, HMRC’s total tax receipts were £623bn. There are many tax streams, such as fuel, tobacco and alcohol duties that make up this figure and do not feature below, so no point in trying to work out what numbers in the quiz would add up to £623bn. Question 1 – how much tax revenue did CGT generate in 2018/2019? Was it: a) £10bn b) £30bn c) £50bn d) £70bn Question 2 – how much tax revenue did Income Tax generate in 2018/2019? Was it: e) £40bn f) £90bn g) £140bn h) £190bn Question 3 – how much tax revenue did Corporation Tax generate in 2018/2019? Was it: i) £20bn j) £40bn k) £60bn l) £80bn Question 4 – how much tax revenue did VAT generate in 2018/2019? Was it: m) £80bn n) £130bn o) £180bn p) £230bn Question 5 –...
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