Government close to hi-tech share agreement

Treasury minister Stephen Timms yesterday told the Commons he was in discussions with concerned companies in a bid to find a solution to the problem which has left a number of hi-tech companies with large tax bills.

Companies involved in discussions include online auction website QXL and internet technology manufacturer Cisco Systems, which recently threatened to scrap plans to employ an extra 4,000 staff in the UK because of the dispute.

QXL finance director Robert Dighero recently confirmed he would be meeting Revenue and Treasury officials to discuss the issue.

It is understood the solution may include moving the tax burden away from the companies and on to the individual share owners when they exercise the options, as long as they agree.

A rapid solution to the disagreement would counter any embarrassment for the government as it attempts to make the UK the leading environment in which to trade electronically.

Chanellor Gordon Brown said he would ‘consider’ legislation changes in the recent Budget.

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