
What will happen to our small businesses?
Can it really be that Sajid Javid is so stupid as to come along and say “sorry boys and girls, yes, of course, I applaud what you are doing but, tough, I want more tax from you “?My son’s story
My son has welded together 3 businesses in the last two years. At the time of the acquisition, they employed sixty-five people. They now employ north of one hundred and growing all the time. That’s another 35 people paying more tax and a business that pays more National insurance, etc. He is not a George Soros, a Peter Hargreaves or a John Caudwell. He is just a lad who is an ambitious entrepreneur who doesn’t expect to be whacked by an inordinate level of Capital Gains Tax courtesy of the musings of a bunch of “experts” at the IFS. Indeed what our Chancellor should be doing is the reverse of the IFS’s direction of travel. For years now I have suggested that CGT should not apply to individuals that invest in our list, traded companies that have a market capitalisation of less than £250m at the point/ time of investment. There are some fourteen hundred of these on the LSE and AIM and their very existence is under growing threat.What’s the solution?
So the time has come to get radical and realise that the only hope for raising liquidity in this also vital area of the economy is to make trading in the equity shares of these companies free of the stifling hand of CGT. It may come as a surprise to those in the Treasury who probably have never owned and traded equity in their lives but greater liquidity improves the attractiveness of any market place and when that happens in this case then more companies want to sign up. Thus more beneficial long term capital is raised, which in turn leads to growing companies and more tax generation to satisfy the requirements of the Exchequer. Truly a virtuous circle Sajid Javid, who I met years ago when he was a junior Treasury Minister, I know is well capable of understanding all of the above, now has the perfect opportunity to act on all of this on March 11th but will he?Share this story