Beauhurst questions CGT proposals
Beauhurst believes that new report on Capital Gains Tax (CGT) could have a negative effect on entrepreneurs.
In July, the Chancellor of the Exchequer Rishi Sunak asked the Office of Tax Simplification to review the effectiveness of CGT and the current rules. The government is seeking ways of paying for the costs of Covid-19.
The initial report is on the policy and principles of the tax, while next year there will be a report on technical and administrative issues.
There are a number of recommendations but the one area that concerns Beauhurst is the idea that gains should be taxed at the same rates as income. The problem is that many entrepreneurs forgo short-term income for longer-term gains, which can be generated in one single year.
The proposal could mean that any gain above £150,000 would be taxed at 45%. That would be higher than any other European country. Businesses may choose to set up in other jurisdictions.
Ripple Energy, which provides individuals with the chance to own part of a wind farm or solar park, has raised 88% of its £350,000 target. The pre-money valuation is £5.3m. Seedrs is handling the offer.
Ripple has developed a clean energy ownership platform that has already handled more than £1m of transactions by more than 500 customers. The first pilot wind farm was launched during the summer. That was a partnership with Octopus Energy and Co-op Energy. Ripple believes that customers could save up to one-quarter of their electricity bill over 25 years for an upfront cost of £1,800.
Revenues are generated from arrangement fees from customers, management fee paid by an ownership co-op, a fee paid by suppliers for each new customer secured and commissions on products sold via the platform.
Management wants to expand into the business to business market.
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