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Businesses lobby Darling on tax Darling tax talks 'constructive'
(19 minutes later)
Chancellor Alistair Darling is meeting UK business leaders to discuss their concerns over his changes to the capital gains tax system. Business lobby groups have said that a meeting tackling concerns over changes to the UK capital gains tax (CGST) system had gone well.
The groups, which include the CBI, argue that the planned changes to the tax will undermine small businesses and stifle entrepreneurship. After senior figures met Chancellor Alistair Darling, a government source said the talks had been "constructive".
Mr Darling says the measure will ensure private equity firms pay fairer taxes. The groups, which included the CBI, argued that the planned changes to the tax would undermine small businesses and stifle entrepreneurship.
The government's plans mean that all capital gains will be subject to a flat 18% charge. CBI chief executive Richard Lambert described the meeting as "positive".
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. And director-general of the British Chamber of Commerce, David Frost, welcomed the outcome.
"The chancellor has agreed to work with business on measures to stimulate enterprise in the UK and seek ways to find a way forward on their issue of CGT," Mr Frost said.
ConcernConcern
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 government plans to make all capital gains be subject to a flat 18% charge.
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. 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.
Mr Darling argues that the measure will ensure private equity firms pay fairer taxes.
But 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 added that 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."