Budget 2012: Setback for Entrepreneurs
Whilst there were some measures in today’s Budget to boost entrepreneurial activity, the Chancellor’s announcement on interest relief will come as a blow for some UK entrepreneurs, according to David Kilshaw, tax partner at KPMG.
David said: “Until today, an entrepreneur who set up a trading company could borrow to fund the money he put into the business and set the interest payments against his tax bill. This encouraged taxpayers to take risk, fund growth and employ people.
“Although we await the small print, it seems the interest relief is to be capped at the higher of £50,000 and 25% of their income.”
“This measure discourages those looking to borrow to build. Far from encouraging risk takers, it could put a cap on entrepreneurial adventure.”