Proshare has joined the growing ranks of organisations critical of tax changes announced in this week’s Pre-Budget Report, expressing concern over the ‘unintended consequences’ of capital gains tax changes.

The group, which promotes the benefits of employee share ownership, said the 1.7m employees making monthly savings through a Sharesave Save As You Earn scheme could now face an 18% tax charge instead of a possible 5% rate.

‘While the Treasury may have sound reasons for simplifying CGT, it would appear the consequences for employees saving through employee share plans had not been fully assessed. These apparently unintended consequences contradict the government’s stated commitment to encouraging long-term saving and to its support for wider share-ownership,’ it said.

Under current rules, basic rate taxpayers who hold on to their shares for two years benefit from a 5% rate on any CGT liability when they sell. Higher earners currently pay 10%.