Bipartisan stance against disliked CGT proposal

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.

Further reading:

Brown’s business council ‘won’t discuss CGT’

Employer groups join forces over CGT