Changes and clarity needed to create and keep the next generation of
Bransons, Dysons and Bartletts, says UK Head of Tax
Britain’s tax system is crushing entrepreneurs and needs to be changed if the
government wants more people in Kent to start, scale and sell a business, a
tax expert has warned.
Praveen Gupta, UK Head of Tax at international accountancy and business
advisory group Azets, with Kent offices in Maidstone, Ashford, Canterbury,
Sandwich and Sidcup, said the current system needed changing to encourage
entrepreneurs to start businesses, hire staff and help the UK economy grow.
“There is no incentive to set up, scale and sell a business in the UK.
“It costs more than ever to recruit staff and if you are able to sell your
company, the Treasury takes a bigger slice of the proceeds than it has in
decades.
“We understand the government needs to balance the books, but right now the
tax system is preventing entrepreneurs from doing what they do best and the
economy is suffering as a result.
“There’s a real risk the UK will lose the next generation of Bransons, Dysons
and Bartletts unless something changes – either because they’ll go abroad or
because they won’t take the leap and start their own businesses.”
Praveen proposes a four-part solution to take the shackles off would-be UK
entrepreneurs:
1. Raise the Employment Allowance rate to £50,000.
2. Slash the rate of Capital Gains Tax (CGT) to 10% for people selling a business.
3. Restore the Business Asset Disposal Relief (BADR) lifetime limit to £5m.
4. Introduce a two-year Employment Tax Roadmap.
He said: “This approach would make it easier for businesses to hire, reward
founders who have successfully exited a company – especially an SME – and
provide stability for the UK business community about the government’s plans
for Employment Tax policy.
“Any impact this would have on Treasury income would be offset by the fact
that there would be more money going into the economy as a result of these
changes, and more jobs created across the UK.”
Praveen explained that raising the employment allowance to £50,000 would give
employers more confidence in managing their costs and improve their
willingness to hire new staff.
“A £50,000 employment allowance threshold would cut the National Insurance
costs of the SMEs in the UK, as an employer wouldn’t have to pay anything
unless their wage bill was more than £333,333 - currently NIC is due when a
wage bill reaches circa £70,000.
“This small change would make a significant difference to SMEs – and to the
UK’s employment figures – as firms would be more willing to hire people as
they would know the NI costs could be managed and they’d have the funds to do
it.”
When it came to changing CGT and BADR, Gupta argued that a new CGT threshold
and a restored £5m BADR limit would enable successful entrepreneurs to benefit
more from business sales – and potentially make them more willing to invest
their earnings back into UK businesses.
“Entrepreneurs typically don’t retire – many of them invest some of their
hard-earned money from selling their businesses into start-ups or new
companies looking to scale.
“Taking less of the money they make from selling a company would give them a
larger amount to invest in new businesses, effectively creating an army of
business angels who could help the entrepreneurs of the future grow.”
Praveen also called for a rolling two-year Employment Tax Roadmap, which he
said would allow business owners time to plan ahead of any new changes being
introduced.
“The last two Budgets have had a significant impact on businesses, and both
have given them little time to get ready for any changes the new tax year
brings,” he explained.
“An Employment Tax Roadmap would enable business leaders to plan more
effectively and budget more accurately, which create more stability for
businesses and the economy – in terms of growth, tax revenues and
recruitment.”
Praveen concluded: “If the UK wants to avoid its entrepreneurs becoming an
endangered species and really fuel economic growth, the government needs to
take action now and evolve the tax system into something that encourages
rather than stifles entrepreneurs and which gives them the stability they need
to start and scale businesses.
“If it can achieve that, the economy and the country will be much better off.”
Based on latest official figures, there are 405,000 VAT and/or PAYE businesses
in the South East.
Figures from Companies House analysed by Azets show that there were nearly
13,700 fewer company incorporations in the 2025 calendar year compared to
2024.
[Data from the ONS shows there were an estimated 104,000 fewer payrolled employees between March 2025 and March 2026.
Based on data from the ONS, there were an estimated 29,000 fewer vacancies in the UK between January and March 2026 compared to October to December 2025 and there were an estimated 65,000 fewer vacancies during January to March 2026 compared to a year ago.
Figures from the ONS show that around 75,000 more people aged 16 to 34 left Britain than arrived in 2025. This gap has grown every year since 2022.
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