The heads of the British Chambers of Commerce, CBI, Federation of Small Businesses and Institute of Directors say the impact of chancellor Alistair Darling’s decision to abolish capital gains tax taper relief ‘will be felt throughout the economy’ by ‘discouraging longer-term investment and risk-taking’.

‘Owners of small enterprises…are now faced with selling up before April or facing a substantial dent to their investment,’ the letter said. ‘The 1.7 million ordinary employees who are in company share schemes could also face an 80% increase in their tax bill and a serious disincentive to taking up and retaining share options in the future. Business angels and venture capital funds say they too will be discouraged from taking risk and investing for the long game.'

Their letter to Darling follows an open letter by Richard Lambert, CBI director-general, last week, attacking the proposal for putting hundreds of thousands of small businesses at risk.

The business groups plan to meet the chancellor to understand why he made his surprise decision and work with him to resolve the issue.

Further reading:
CBI delivers stinging attack on Darling over CGT
Business counts cost as Darling hijacks Tory ideas