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| Businesses lobby Darling on tax | |
| (about 9 hours later) | |
| Chancellor Alistair Darling is meeting UK business leaders to discuss their concerns over his changes to the capital gains tax system. | |
| The groups, which include the CBI, argue that the planned changes to the tax will undermine small businesses and stifle entrepreneurship. | The groups, which include the CBI, argue that the planned changes to the tax will undermine small businesses and stifle entrepreneurship. |
| Mr Darling says the measure will ensure private equity firms pay fairer taxes. | Mr Darling says the measure will ensure private equity firms pay fairer taxes. |
| The government's plans mean that all capital gains will be subject to a flat 18% charge. | The government's plans mean that all capital gains will be subject to a flat 18% charge. |
| This replaces a more complex system, in which the rate could vary between 10% and 40%, depending on the type of asset and the length of time it had been held. | This replaces a more complex system, in which the rate could vary between 10% and 40%, depending on the type of asset and the length of time it had been held. |
| Concern | Concern |
| The CBI, the Institute of Directors, the British Chambers of Commerce and the Federation of Small Businesses said in an open letter to the chancellor last week that they were "deeply concerned" about the proposals. | The CBI, the Institute of Directors, the British Chambers of Commerce and the Federation of Small Businesses said in an open letter to the chancellor last week that they were "deeply concerned" about the proposals. |
| They said the proposals, which they described as "a bolt out of the blue", would hurt small businesses and employee share-ownership schemes, as well as discouraging risk-taking by venture capital firms vital to economic growth. | They said the proposals, which they described as "a bolt out of the blue", would hurt small businesses and employee share-ownership schemes, as well as discouraging risk-taking by venture capital firms vital to economic growth. |
| "The impact of the decision will be felt throughout the economy," their letter said. | "The impact of the decision will be felt throughout the economy," their letter said. |
| "The net effect will be to set back the growth of the economy over coming years by discouraging longer-term investment and risk-taking." | "The net effect will be to set back the growth of the economy over coming years by discouraging longer-term investment and risk-taking." |
| "Combined with this week's decision on capital gains tax, our members feel the government's 10-year effort to create a pro-enterprise agenda has been put into reverse gear." | "Combined with this week's decision on capital gains tax, our members feel the government's 10-year effort to create a pro-enterprise agenda has been put into reverse gear." |