MARGARET BALFE ‘Business owners are focused on minimising their tax bills’

Tax Director ifac

TAX DEBT An amnesty for warehoused tax debt is unlikely although we understand there have been some write-offs, mainly concerned with dissolved businesses. Hardship would need to be a significant factor for any successful write-off case, in our view.

CAPITAL TAXES Current rates probably don’t hinder transactions significantly, but increases certainly could in the context of buying and selling businesses, entrepreneurship, and businesses surviving to the next generation. Speculation surrounding the report of the Commission on Taxation and Welfare, and suggestion of a potential reduction in capital tax reliefs, is encouraging action by clients.

EXIT RELIEFS Our recent Farm Report found that c.65% of our clients surveyed do not have a succession plan. Another recent ifac report, which surveyed 200 food and agribusiness owners, found that succession is not on the agenda for 50% of businesses. As the report notes, while succession planning is complex it is disappointing to see that 40% of business owners have no Will.

The report also found that in the current environment SME business owners are focused on minimising their tax bills and getting their tax structure right. Cash retention is paramount while making taxefficient payments to key employees is a vital tool in any exit. For those looking to sell their business, the reasons remain the same. Making the decision to retire (38%), difficulty operating in the current climate (38%) and reduced margins (28%) are the three most popular reasons driving these exits. Our tax team work with business owners to deliver a practical, solution-driven approach on these critical matters.