Entrepreneurs’ Relief

Lord Leigh of Hurley Excerpts

Thursday 26th February 2015 Lords Chamber

Asked by

[Lord Leigh of Hurley]

To ask Her Majesty’s Government what assessment they have made of the economic impact of the increase in Entrepreneurs’ Relief since May 2010.

[Lord Newby (LD)]

My Lords, no formal economic assessment has been made, but HMRC monitors and regularly publishes information on entrepreneurs’ relief and its take-up. The value of entrepreneurs’ relief is forecast to rise from £1.5 billion in 2010-11 to £3 billion in 2014-15. This Government have increased the lifetime limit from £2 million to £10 million and this is expected to benefit those who want to grow their business and reinvest their gains into new enterprises.

[Lord Leigh of Hurley (Con)]

My Lords, I thank my noble friend and draw your Lordships’ attention to my declaration in the register of interests. The great success of the UK economy has not happened by chance, but by the implementation of policies designed to encourage business. As mentioned, the increase in the cap from £2 million to £10 million has had a dramatic effect in allowing and encouraging entrepreneurs to start new businesses. However, many of them have gone through this cap, which is a lifetime amount. Will the Minister consider taking away that cap and possibly the 5% limitation as well?

[Lord Newby]

My Lords, as the noble Lord has pointed out, we have increased the cap fivefold. However, we believe at this point that the limit is necessary as part of the overall design of the relief and to ensure that the relief is well targeted and not open to misuse. As I said in my initial Answer, it is worth £3 billion already.