In response to the Pre-Budget Report, wherein the Chancellor Alistair Darling proposed raising the Capital gains Tax threshold from 10 to 18 per cent, four of the country’s business leaders – from the Confederation of British Industry (CBI), British Chambers of Commerce, Institute of Directors, and the Federation of Small Businesses (FSB) – have come together to challenge the decision.
In a meeting with Mr Darling yesterday, the group urged him to scrap the 80 per cent increase, and he agreed to give it consideration. David Frost, Director General of the British Chambers of Commerce, said after the meeting:
“The Chancellor can now be in no doubt of the views of business towards the changes he made to Capital Gains Tax in the pre-budget report. The Chancellor has agreed to work with business on measures to stimulate enterprise in the UK and seek ways to find a way forward on the issue of CGT.”
George Osborne, the Shadow Chancellor, has said it’s about time Mr Darling realised that the Pre-Budget Report was badly thought through and was potentially damaging to businesses, as reported in The Times, and hopes are high that the Chancellor has left the door open to alternatives.
John Wright, FSB National Chairman, said: “This was a constructive meeting and we hope that there is scope for a compromise that will meet the aims of the Government without damaging the many entrepreneurs across the country. The current proposals to change taper relief on capital gains tax go in the wrong direction and need to be changed.”
However, the Treasury has denied any reversal on the proposed policy, and Mr Darling has insisted he will not back down; the change in CGT will raise an extra £900 million a year. In a letter to the Chancellor last week regarding the proposal which will see small businesses and investors facing almost double the amount of Capital Gains Tax come next April, Richard Lambert, Director General at CBI, said it “undermines the 10 year effort by this government to promote enterprise and risk-taking within the UK” and will “hold back investment”.
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