TaxPersonal TaxChancellor moves to stem outrage over share options tax on dot.com companies

Chancellor moves to stem outrage over share options tax on dot.com companies

Gordon Brown has announced a review of the national insurance charge levied on share option schemes used by internet start-ups to attract and retain staff.

The disclosure was made yesterday during the chancellor’s visit to New York where he unveiled the first of several pledges expected to be included in a ‘pro-enterprise’ Budget next month.

Internet companies have protested that the tax treatment of these schemes means they are faced with multi-million pound national insurance bills even when they are making huge trading losses.

This problem affects dot.com companies particularly severely because of their soaring share prices.

The next Budget is expected to contain a number of tax breaks and other measures aimed at making Britain a favourable environment for starting up new businesses.

The ‘nation of entrepreneurs’ theme has long been espoused by Brown and trade secretary Stephen Byers, who has tried to implement several changes to company law including trying to remove the stigma from banktuptcy and making company insolvency easier to deal with through the insolvency bill.

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