Chancellor Gordon Brown is expected to face a rough ride at the House of Commons today when he appears before the powerful Treasury select committee to answer questions on the cost of changes to capital gains tax.
Accountancy Age, 10 Dec 2001
Experts have calculated the reforms proposed in the pre-Budget report will cost the Exchequer Pounds 2bn instead of the Pounds 10-40m estimated by the Treasury.
Advisers have told the select committee the changes will inadvertently encourage people to reclassify income as capital gains.
Liberal Democrat committee member David Laws will challenge Brown to defend his proposals.
Speaking before the hearing Law said: 'This is another major loophole which will allow well advised wealthier individuals to cut back their income tax liability.
'This is yet another example of the chancellor's meddlesome tinkeringapproach to tax policy badly backfiring.'
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