Should we replace entrepreneurs’ tax perks with employee ownership?

The chancellor could well abolish entrepreneurs’ relief in the Budget. We could use some of the tax savings to create more worker-owned businesses, says Merryn Somerset Webb.

Rishi Sunak: could scrap entrepreneurs' relief © Getty
(Image credit: AFP via Getty Images)

With a new chancellor and a new virus on the go, second guessing next week’s Budget is rather harder than usual. But one thing that appears to be becoming consensus is that entrepreneurs’ relief will be scrapped.

The relief, which allows company owners to sell up and pay a reduced rate of 10% (against 20%) of capital gains tax on up to £10m of gains, costs the Treasury around £3bn a year in lost revenues. Detractors say that’s too much: it’s expensive and benefits very few people.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.