Having slapped down business demands last week for a U-turn on his capital gains tax reforms, the pressure on the Chancellor of the Exchequer, Alistair Darling, to reconsider continues to mount.
And there may be a chink of light at the end of the tunnel. Having acknowledged the near-unanimous opposition to his proposals, particularly his decision to scrap the 10 per cent rate for business assets held for two years or more, the Chancellor may still be open to persuasion.
For instance, Lord Sainsbury, the former science minister, yesterday told a group of venture capitalists that a reprieve from the new regime might be possible, if they could make a case for early stage investors in businesses. Even Labour MPs such as George Mudie, a leading Brownite, have expressed dismay at the lack of consultation.
All of which begs the question, as to why Mr Darling embarked on this wholesale reform of CGT without better advice on its implications for venture capitalists, small businesses and employees in SAYE schemes.
All these groups will suffer under the new regime, when the original target was the carried interest of private equity investors who pay less tax than their cleaners.
.
The cack handed handling of this whole affair and the failure to consult beggars belief, particularly when the Prime Minister has always presented himself as a supporter and proponent of venture capitalism.
Let’s hope sense prevails and the necessary tweaks are made to the new regime so as introduce greater simplification, without hurting the very people who are building the businesses of the future on which our economy depends.
Comments
Trackbacks