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Business groups have been pressuring Alistair Darling to rethink his decision to abolish taper relief, as it would damage entrepreneurs, particularly small firms.
Mr Darling recently told the CBI conference that he expected to make a decision in the next few weeks. Now that time frame has been extended to the New Year, amid speculation of behindthe-scenes press breifing and last minute U-turns.
Consultation
The Chartered Institute of Taxation (CIOT) has recommended that the Government announces that any changes to CGT will not come into force until April 2009 and that, in the intervening period, a full consultation on the proposals is carried out.
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The CIOT claims this is the only alternative to the further uncertainty caused by the announcement by Mr Alistair Darling, that he will not make any decisions on further changes to the CGT proposals until he is ready in the New Year.
Rob Ellerby, CIOT President, said: “The CIOT is deeply concerned that this puts many small businesses and individuals in an extremely difficult position. All businesses and individuals want to be able to plan their tax affairs with a degree of certainty. Any entrepreneur considering disposing of their business now has scant idea of the tax implications if the sale is after April 5 2008.”
The CIOT believes that the current uncertainty means that some entrepreneurs may accelerate business sales for tax reasons instead of for commercial reasons.
Rob Ellerby added: “The problems highlighted are due to the failure to consult on this whole area prior to making the initial announcement in the Pre-Budget Report.”
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Susie Hughes © Shout99 2007
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