CGT relief for entrepreneurs: instant reaction
CGT olive branch too little too late, say tax experts
The news that chancellor Alistair Darling has offered an olive branch to the
entrepreneurial community through an easing of his tough stance on CGT has met
with a tepid response, with many concerned that the system remains complex and
uncertain.
PricewaterhouseCoopers said that to introduce a lower rate of CGT, 10%, for
the first £1m qualifying gains only re-introduced complexity to the tax system.
‘Frequently tweaking the UK tax system – as has been evident with the CGT
system – only adds to complexity,’ said Kevin Nicholson, UK head of
entrepreneurs and private companies at PwC.
‘If the government is committed to simplifying the UK tax system, it must
work with business to implement a long term strategic tax policy framework.’
ICAEW tax faculty head Frank Haskew said complexity had been introduced into
what was essentially a simplification measure: ‘ Whilst we welcome the
concessions to mitigate the impact on small businesses and entrepreneurs
following the subsequent consultation with business bodies, we are concerned
that this could put greater pressure on a tax system that is already struggling
to cope.’
‘Taxpayers deserve better treatment than this,’ said Haskew, urging the
government top postpone any changes until April 2009.
ACCA criticised the government for taking so long to announce the
‘entrepreneurs’ relief’ details.
‘It has been a hard slog to win the government round on this issue and they
have taken their time in coming to a decision that is more palatable for the
UK’s SME sector,’ said ACCA head of tax Chas Roy-Choudhury.
The CIoT said the whole episode showed that consultation is key on such
fundamental and important tax change plans.
‘If there is one lesson to come out of the CGT saga, it is the importance of
consultation with those affected. In taxation, the only time that change should
come before consultation is in the dictionary.’
Penny Bates of Menzies said the change failed to provide benefit dfor the
serial entrepreneur: ‘It was precisely these people who contribute to the
continuing success of the country’s economy that were originally being
incentivised by the introduction of taper relief in 1998 who are still being
penalised for that effort.”
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Further reading:
Darling offers ‘entrepreneurs’ CGT olive
branch