Business lobby groups have criticised the chancellor over speculation that he will offer capital gains tax relief for entrepreneurs to compensate for the scrapping of taper relief.
The chancellor Alistair Darling will be making further changes to the capital gains tax, it has been reported. Possible changes could include giving £100,000 in tax relief for small businessmen and women who sell up and retire.
This news would come as a relief to small businesses, which were due to be affected in April 2008 when Darling plans to impose a flat rate of 18% for capital gains tax.
However, David Frost, director-general of the British Chambers of Commerce (BCC), believes that the chancellor did not go far enough when he announced the plans to help those retiring from businesses.
He said: "This proposal goes some way to meeting our concerns in that it will help those business owners that are seeking to retire. However, there is a wider concern in that the serial entrepreneur, those that build businesses, will still be hit by the proposals to have a higher single rate of 18%. This will damage the entrepreneurial culture in the UK."
George Osborne, the shadow chancellor has also revealed his opinion about the matter by signing a petition drawn up by the Forum of Private Business urging the government to reverse its decision on capital gains tax.
The FPB’s chief executive David Roughley who met with Osborne said: "Mr Darling seems to have recognised that this was an ill thought-out policy. It’s a start, but reducing the burden for business owners on the verge of retirement is only a small step. We are glad that we have got George Osborne’s support on this. The FPB believes that the chancellor has not gone far enough, and that serial entrepreneurs investing in and selling companies will still be deterred by the change."
© Crimson Business Ltd. 2007
