Ex-HMRC head goes through revolving door; forgets everything he ever knew (or should know)

From The Guardian:

The former head of HM Revenue and Customs has called on the government to scrap a controversial tax break designed to help entrepreneurs, which he said was costing the country £2bn a year in lost tax yet provided “no incentive for real entrepreneurship”.

Troup’s intervention on Wednesday came in response to a Guardian report on Tuesday showing thousands of the country’s richest people were exploiting the policy to pay as little as 10% tax on billions of pounds’ worth of capital gains.

Whatever your view, gut instinct tells me that if people build up a business from scratch and sell it, such gains ought to be taxed at a lower rate (aka Entrepreneur’s Relief) than straight investments gains, which of necessity mainly accrue to the already wealthy. We can argue about the finer details later on (the £10 million limit seems excessively high to me, why not go back to retirement relief and just exempt the first £1 million or so and tax the rest at full rates?).

For some reason, this ex-HMRC is homing in on Entrepreneur’s Relief while missing the obvious:.

What he should be telling people to look at first, if anything, are:

1. Inevstor’s relief, which is a 10% CGT rate for people who in subscribe for new shares in the right kind of company, and

2. SEIS, EIS and VCT reliefs, which include a 0% CGT rate on shares (among many other goodies).

It’s those two items which are designed to – and do – benefit the already wealthy, not Entrepreneur’s Relief.

How the heck he ended up running HMRC is a mystery to me, he’d have failed the most basic tax exam.