Over 2000 solvent companies were placed in liquidation in March as directors rushed to cash in on lower tax rates before changes to the tax rules in April. Since then HMRC has clamped down on business owners winding up companies to access entrepreneurs’ relief at 10 per cent rate on any capital gains. Now the 10 per cent rate is only available to company owners who are liquidating for practical reasons, such as retiring or switching industries. Company owners who want to carry on in the same business during the two years after they liquidate their companies can no longer claim the relief. As the Financial Times has pointed out: ‘Self-employed people often argue they should not have to pay as much tax as PAYE employees, because they take more risk setting up a business, and their pensions and private healthcare schemes can be more expensive. So the government has tolerated small company owners paying themselves in dividends, which incur lower rates of tax than salaries.’ The tax on dividends was also changed from April, so that the highest earners now pay 38.1 per cent. Anyone who pays themselves more than £21,667 a year in dividends is now worse off. 20.6.16