TaxAdministrationHMRC backlog holds up co sales pre-CGT change

HMRC backlog holds up co sales pre-CGT change

Delays at HMRC are holding up clearance for the sale of thousands of companies before the CGT kicks in

Accountants are reporting a rush of entrepreneurs seeking to sell their
companies before a higher rate of tax takes effect next month, which has
overburdened the HM Revenue & Customs
(HMRC) with applications for approval of sales before 5 April, when the capital
gains tax (CGT) rate will increase from 10% to 18%.

The backlog in the clearance process could leave many businesses with an
unexpected tax bill running into millions of pounds, The Times
reports.

‘There is a mad rush of people selling up now to avoid paying the extra tax
after 5 April. But there are huge delays in the processing of clearance
applications at HMRC,’ Mike Warburton,
Grant Thornton
senior partner, said.

Accountants are warning businesses, which have not received clearance from
HMRC before selling, that there is no guarantee how much tax they will have to
pay and this would leave them particularly exposed to the anti-avoidance
crackdown. Others advise clients to go ahead without it because of the high risk
that a clearance application would not be processed by 5 April.

Further reading:

Darling’s CGT changes risk breaking EU law

Final CGT rules hammer entrepreneurs

Read
story in The Times

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