CBI warns against private equity clampdown
UK's largest business organisation warns that any clampdown on private equity sector's tax advantages could affect all businesses
The CBI has lept to the
defence of private equity in its submission to a Treasury investigation into the
controversial sector.
In the strongly worded submission to
the Treasury’s review of
‘carried interests’ – profits which private equity execs earn on deals that can
benefit from a 10% tax rate – CBI director general Richard Lambert warned that
imposing any restrictions would affect the entire spectrum of UK businesses.
‘It would be easy to drive (private equity) offshore through a few
injudicious decisions, particularly spurred out of a fascination to expose and
tax its highest earners,’ Lambert told the FT.
He said claims that private equity players were ‘ruthless asset strippers’
practising ‘casino capitalism’, were based on misunderstandings.
Further reading:
Stamp duty opens up PLCs to private equity
takeovers
Private equity seeks new model to cut
advisers’ fees