ICAEW Says Stability in the Tax System Needed to Support Entrepreneurship
The Institute of Chartered Accountants in England and Wales (ICAEW) has said that doing business in the UK is too uncertain and expensive, and more stability in the tax system is needed. Their comments were in response to the government’s call for evidence on how the tax system can better support entrepreneurs.
ICAEW considers that blunt tax hikes and tax policies have disproportionately increased the cost base of UK businesses and these need to become a thing of the past.
They also point to a lack of meaningful incentives that would unlock investment from serial entrepreneurs and family office investors. For instance, an outright capital gains tax exemption could be more effective in encouraging the reinvestment of capital into new ventures.
Recent changes to the inheritance tax and domicile rules have also complicated reinvestment decisions and may tempt some to move funds abroad.
From April 2026, the income tax relief that can be claimed by someone investing in a venture capital trust (VCT) will be reduced from 30% to 20%. ICAEW have called for this decision to be reversed.
ICAEW have suggested that changes also be made to the enterprise investment scheme (EIS) and enterprise management incentives (EMI) to make them more effective and attract talent to entrepreneurial businesses. The government’s call for evidence closed on 28 February 2026. It will be interesting to see what changes come from the consultation.
The government has published a technical consultation on its new Founders’ Relief. The consultation itself provides an overview of the proposed qualifying conditions for it, including individual and company requirements and what must be satisfied. HMRC’s own figures, however, show that the strict conditions mean only about 600 individuals will be eligible to apply each year.
It’s bad news for mortgage holders and borrowers as the Bank of England (BoE) raises interest rates by a quarter point to 4% for the first time since August 2023.
