16 Sep 2019

Tax Reliefs - is Brexit an opportunity?

20190916 MHA Monahans tax relief Brexit

Enterprise Investment Scheme and other advantageous tax reliefs – is Brexit an opportunity?

Having just obtained Enterprise Investment Scheme treatment for a client with slightly unusual circumstances, we started thinking about how Brexit may affect this and other valuable tax reliefs.

The Enterprise Investment Scheme and Seed Enterprise Investment Scheme provide generous tax breaks to those who invest in early stage companies. However, like most of these “tax advantaged” reliefs they are governed by the EU’s State Aid rules.

From the Enterprise Management Incentive Scheme Share Options Rules, through the creative tax reliefs like Research & Development tax reliefs, Patent Box, Museums & Galleries Exhibition relief to various government and local authority grants, the EU State Aid rules govern how generous these reliefs and grants can be, and all require EU approval to ensure that they do not unfairly advantage UK taxpayers over others in the EU.

Despite the Brexit paralysis we find ourselves in at the moment, this will not go on forever, so will an exit from the EU provide an opportunity for the government to throw off the shackles of the EU State Aid rules with regard to all these reliefs and grants, and make them more generous to encourage greater investment in the UK and the UK workforce?

This will depend on the sort of deal we do (or don’t) strike with the EU, but with the UK potentially going it alone on the world stage, you would not want to bet against a widening of all these reliefs and further expansion, with potentially new reliefs coming on stream to promote the fact the UK is still open for business.

Watch this space, as you may find your business can benefit from tax breaks not previously available, post Brexit, whenever that might be…….