Accountants back Furse on stamp duty
Senior accountants have backed London Stock Exchange chief executive Clara Furse after her public condemnation of chancellor Gordon Brown for failing to abolish stamp duty on trading shares in his recent Budget.
In a speech she made to the Institute of Directors last week, Furse launched a stinging attack on the chancellor saying stamp duty ‘would be seriously and irreversibly damaging to the financial services industry in the UK’.
Alternative Investment Market specialist Chilton Taylor of Baker Tilly told Accountancy Age: ‘The chancellor is again ignoring the importance of a secondary market in shares to support liquidity. He has removed reinvestment relief and now he has not abolished stamp duty on trading shares.’
Since the abolition of tax on assets and goodwill, business investors have found it is more lucrative to buy troubled unlisted business than take substantial shareholdings in public companies. Mike Warburton, senior tax partner at Grant Thornton, agreed, adding: ‘The stock exchange is not in a strong position to criticise when it was offered [the abolition of stamp duty] on a plate some years ago.’
In 1990, the then chancellor John Major was prepared to abolish stamp duty but unable to do so because the LSE’s trading mechanism Taurus could not cope with the change. He also said, following the terrorist attacks on September 11th, this was the wrong time to push for the abolition stamp duty, as the UK would be seen to be taking advantage of New York in its misfortune.