Entrepreneurs are up in arms following announcements made last week that their tax bill is likely to increase by 8% on the sale of their business.
A number of petitions have sprung up over the past few days following chancellor Alistair Darling’s revelation that he plans to scrap capital gains tax taper relief in April 2008, replacing it with a flat rate of 18%, an effective increase from 10% for small firms.
Founder of text information service Texperts Sarah McVittie and Duncan Cheatle, founder of The Supper Club, are leading the way with the creation of a group on social networking site Facebook called ‘Entrepreneurs Against the Abolition of Taper Relief’, which now has 442 members.
A formal petition posted by Cheatle on the Downing Street website has attracted 7,613 signatures so far.
Commenting last week, Cheatle said: “Alistair Darling, in his pre-Budget speech, proposed abolishing one of the few real incentives to enterprise (CGT taper relief).
“In effect those of us who may look to sell our businesses in the future to those better able to build it further now face almost a doubling in the tax we will have to pay. How can this help encourage enterprise?”
Four of the UK’s major business groups have also slammed the proposals, uniting in a rare move to urge the chancellor to reconsider.
A letter penned by the British Chambers of Commerce (BCC), the Confederation of British Industry (CBI), the Federation of Small Businesses (FSB) and the Institute of Directors (IoD) said that the move could seriously hinder UK enterprise.
The letter warned: “The net effect will be to set back the growth of the economy over coming years, by discouraging longer-term investment and risk-taking.”
© Crimson Business Ltd. 2007
