Private equity association boss to go over tax row

BVCA chief executive Peter Linthwaite is set to lose his job over the tax row that has engulfed private equity, reports said.

The head of the British Venture Capital Association faced a bruising appearance before MPs yesterday as the Treasury Select Committee began its look at the industry.

The Times says he is set to be ousted by disgruntled industry figures who feel the industry has been outgunned by the unions. 'I think they've tried to do a good job, but they've been very slow off the mark - they really need to get their act together,' one private equity executive was quoted saying.

The industry is likely to lose favourable capital gains tax rules, and possibly the interest relief that helps fuel the buyouts, as part of separate Treasury reviews, advisers think.

MPs were furious yesterday at the evidence given by the BVCA and others yesterday, the FT reported.

Asked about the capital gains issue (which reduces the effective tax rate to 10% for 'carried interest'), Jeremy Hand, the BVCA's deputy chairman, said that buyout bosses paid income tax at the UK rate.

'Stop it. This is really irritating semantics,' Sion Simon, a Labour MP, shouted in response.

Angela Eagle MP called it 'the most obstructive piece of evidence we've been given for a long time,' The Times reported.

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