HMRC backlog as firms rush to sell before April CGT deadline

Following the Chancellor's announcement that the CGT taper relief regime is set to be abolished on April 5th 2008, The Times reports that HMRC are holding up thousands of businesses who want to sell up before the new CGT rules take effect.

On April 6th, the CGT tax rate on business sales will increase from 10% to a flat rate of 18%. The Chancellor has attempted to soften the blow by announcing so-called "entrepreneurs' relief" whereby the first £1m worth of business asset sales will still be taxed at 10% - but this is a lifetime allowance. Any sales over this initial £1m mark will still be taxed at 18% from the next tax year onwards.

According to The Times:

"To be eligible for the CGT rate of 10 per cent, a sale must be complete before April 5. However, businesses that have not received clearance from the Revenue before selling do not have any guarantee on how much tax they will have to pay. Accountants gave warning that this would leave these businesses particularly exposed to the anti-avoidance crackdown announced by the Chancellor in the Budget on Wednesday."

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Sign Up! - Make sure you sign up to our FREE weekly newsletter for the latest tax news and advice for small companies. Posted March 18, 2008

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