Budget 2016: The Budget for entrepreneurs | KPMG | UK

Budget 2016: The Budget for entrepreneurs

Budget 2016: The Budget for entrepreneurs

Dermot Callinan, Head of Private Client, comments on today's Budget announcement and its impact for entrepreneurs.


Also on KPMG.com

Commenting on the Budget today Dermot Callinan, Head of Private Client, commented:

“Whilst some measures seem to increase corporation tax for larger companies through loss relief and interest deduction restrictions, entrepreneurs and private capital have benefited. This seems to be a deliberate tilt of the pitch toward home grown enterprise through a number of measures.”

“The corporation tax rate in the UK was already becoming even more competitive at 18% from 2020, but this move to reduce that to 17% makes it even more attractive to reinvest capital in a company for the longer term. The previously announced tax increases on dividends had already made the extraction of profits from a company unattractive with a top tax rate of 38.1%. This at the time seemed expensive compared to capital gains tax at 28% or even 10% for working entrepreneurs. However, the gap has been opened further as a result of the proposed reduction in CGT to 20% and the proposed introduction of a new Investor Relief to mimic and run alongside Entrepreneurs Relief.

“Therefore, there is little incentive to extract profits enjoying a low corporate tax rate in the company and much better to wait until a capital gain.”


Follow us on twitter: @kpmguk #Budget2016


For further information please contact:

Roger Newby, FTI Consulting

M: +44 (0)7894 093 892

E: roger.newby@fticonsulting.com

KPMG Press office

Tel: +44 (0)207 694 8773

About KPMG

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a revenue of £1.96 billion in the year ended September 2015. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 174,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

Connect with us


Request for proposal