Darling to meet business leaders

Source: Exec Digital UK

Date :22/10/2007 09:10:34

Chancellor of the Exchequer Alistair Darling is to meet leaders of the UK's four biggest business organisations to discuss their concerns over planned changes to capital gains tax.

Business leaders have been joined by unions and the opposition in raising concerns over the decision to abolish taper relief on the tax, announced in Mr Darling's Pre-Budget Report.

They argue that the change will hit small businesses and entrepreneurs rather than the private equity firms it was designed to target.

The meeting comes in response to an open letter to the Chancellor from the CBI, British Chambers of Commerce, Institute of Directors and Federation of Small Businesses warning that abolition of the relief will "undermine enterprise" in the UK.

At the Chancellor's invitation, Richard Lambert, director general of the CBI, David Frost, director general of the BCC, Miles Templeman, director general of the IOD, and John Wright, national chairman of the FSB, will visit the Treasury.

A spokesman for the FSB said they hoped to persuade Mr Darling to rethink his plan to impose an 18% flat rate for Capital Gains Tax on profits from sales of assets, in place of the current sliding scale which can see entrepreneurs pay as little as 10%.

"We want to see if we can't help the Chancellor find a solution which meets the needs of Government but doesn't harm business," said the spokesman

Mr Lambert said: "We look forward to a constructive meeting with the Chancellor to discuss his changes to capital gains tax which have caused real concern amongst the business community."

Earlier, the FSB warned that the proposed changes to CGT would leave entrepreneurs out of pocket not only as they build their businesses but also in retirement.

Many entrepreneurs regard their business as their pension plan, and aim to live off the proceeds of its sale when they reach retirement age. They now face an 80% increase in the amount they are expected to hand over to the taxman, leaving a smaller pot for them to live off in old age.

October 22 2007

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Chancellor of the Exchequer

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British Chambers of Commerce

Institute of Directors and Federation of Small Business