The news that chancellor Alistair Darling has offered an olive branch to the entrepreneurial community through an easing of his tough stance on CGT has met with a tepid response, with many concerned that the system remains complex and uncertain.
PricewaterhouseCoopers said that to introduce a lower rate of CGT, 10%, for the first £1m qualifying gains only re-introduced complexity to the tax system.
'Frequently tweaking the UK tax system - as has been evident with the CGT system - only adds to complexity,' said Kevin Nicholson, UK head of entrepreneurs and private companies at PwC.
'If the government is committed to simplifying the UK tax system, it must work with business to implement a long term strategic tax policy framework.'
ICAEW tax faculty head Frank Haskew said complexity had been introduced into what was essentially a simplification measure: ' Whilst we welcome the concessions to mitigate the impact on small businesses and entrepreneurs following the subsequent consultation with business bodies, we are concerned that this could put greater pressure on a tax system that is already struggling to cope.'
'Taxpayers deserve better treatment than this,' said Haskew, urging the government top postpone any changes until April 2009.
ACCA criticised the government for taking so long to announce the 'entrepreneurs' relief' details.
'It has been a hard slog to win the government round on this issue and they have taken their time in coming to a decision that is more palatable for the UK’s SME sector,' said ACCA head of tax Chas Roy-Choudhury.
The CIoT said the whole episode showed that consultation is key on such fundamental and important tax change plans.
'If there is one lesson to come out of the CGT saga, it is the importance of consultation with those affected. In taxation, the only time that change should come before consultation is in the dictionary.'
Penny Bates of Menzies said the change failed to provide benefit dfor the serial entrepreneur: 'It was precisely these people who contribute to the continuing success of the country's economy that were originally being incentivised by the introduction of taper relief in 1998 who are still being penalised for that effort.''
Further reading:
ICAEW has put forward practical recommendations to help soften the impact of the proposed CGT changes 25 Oct 2007
Darling’s possible backflip on proposed CGT changes by way of a ₤100,000 tax relief softener has received a lukewarm response 01 Nov 2007
Channel breathes sigh of relief as Chancellor unveils capital gains tax concession for entrepreneurs 24 Jan 2008
As delegates at African climate change conference are criticised for not offsetting, events management experts insist buying offsets should become standard practice 29 Aug 2008
Proposals to reduce traffic emissions by tweaking insurance options and tackling urban sprawl are on the drawing board 29 Aug 2008
New team to develop Treasury's green policy and manage new Clean Technology Fund 29 Aug 2008
More news
Recent claims from the oil giant's chief executive suggesting tar sand extraction is required to slow the shift to coal may have caught the eye, but as BusinessGreen.com discovers they do not make much sense 28 Aug 2008
With all eyes on the Democrats' convention this week, environmentalists are asking whether it will live up to the green claims of politicians 26 Aug 2008 More in-depth
Post your comment
Send an email to the Business Green editor at feedback@businessgreen.com
