The Conservatives have allied themselves with some Labour MPs in an effort to reverse Alistair Darling’s decision to raise capital gains tax (CGT) on business assets by 80% from next April, promising to fight the proposal.
Yesterday, George Mudie, Labour MP, questioned Treasury officials on the lack of consultation with small business in relation to Darling’s proposal to withdraw capital gains tax (CGT) taper relief, which has prompted strong protests from UK’s biggest employer groups.
‘The chancellor promised there would not be a knee-jerk response,’ he said to Treasury’s pre-budget committee. ‘You have created some real anger for people running small businesses. Don't you think you should have floated it in front of people who were going to be affected?’
Treasury officials said the department did not formally consult on changes to tax rules and argued there had been a debate 'in the country' on CGT. They defended the change, saying the policy change was aimed at simplifying the tax.
Charles Clarke, the former home secretary, told a small business summit organised by the Forum of Private Business he was sure the chancellor ‘would consider carefully the point of view’. ‘It's obvious that the feeling expressed is very strong in the small business sector,’ he said.
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