Alistair Darling brought capital gains tax (CGT) reforms into the spotlight once again yesterday when he revealed that a promised announcement about concessions such as retirement and reinvestment relief has now been postponed until the new year.
Director general of the BCC, David Frost, said the delay had come as a surprise. "There appears to be confusion in the Treasury about the reforms that they are planning to make, leaving businesses in a state of flux over their taxes," he said.
The Government has been criticised by various business groups since the Chancellor's October pre-budget report, during which he explained that taper relief would be removed. Mr Darling said in his speech that, in order to simplify the existing CGT regulations, a single 18 per cent rate would be introduced across the board.
Groups such as the CBI and the BCC have been campaigning against the changes since they were first unveiled, as many businesses will see an 80 per cent tax increase when the ten per cent former lower limit rate is scrapped. The business community is concerned that many businesses will now sell up and move abroad before the changes take effect in April.
However, the Government's failure to clarify the changes this week has added fuel to the fire as many companies wait to find out what concessions the Chancellor is willing to offer.
Director general of the CBI, Richard Lambert, said: "We are glad that the Chancellor is paying attention to the submissions he has received from the business community, but he needs to get on with this decision urgently, as he promised at the CBI's conference a fortnight ago."
"People need to be able to make decisions about their businesses - whether to invest, or whether to sell up. This uncertainty mustn't be allowed to continue," he added.
Mr Darling said that proposals the Government had received from business groups were "quite complex" and that "further discussions" were needed before finalised proposals are unveiled.
FSB national chairman, John Wright, said: "At least the Chancellor appears to be taking our opposition to the PBR and our proposals for changes to it seriously. I look forward to meeting him again to discuss our proposals in detail."
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