Printers and industry bodies have reacted angrily this week to Alistair Darling’s controversial plans to abolish capital gains tax (CGT) taper relief.
Darling’s proposal, which would mean a virtual doubling of CGT taxation from 10% to 18%, has already faced stiff opposition from within his own party, as well as from the Conservatives.
Now, in an open letter to the Chancellor, the heads of the British Chambers of Commerce, CBI, Federation of Small Businesses and Institute of Directors, have urged Darling to “suspend [his] decision”.
In addition, printers such as Media & Print Investments (MPI) managing director Mike Dolan have expressed their outrage at the Government’s proposal.
Dolan said: “It’s an appalling mistake by Alistair Darling. There are an awful lot of owner-operators of companies, both printers and in other industries, who will undoubtedly suffer from it.”
Multigraphics managing director Gary Lasham said that the proposal would punish individuals, rather than the big “million-making” private equity firms.
He added: “It’s not a tax that’s going to hit the big private equity people. The tax will hit the private individuals who have risked their own money, sometimes their own homes, in order to create a business and create wealth. I think it’s absolutely bloody outrageous.”
Another controversial aspect of the Chancellor’s report was the proposed termination of indexation allowance, which takes into account inflation when calculating CGT.
Chief executive of CPI UK Mike Taylor said: “Obviously assets, by virtue of what they are, do go up in value simply by inflation. So, by eliminating indexation, one is being taxed on inflation. I think that’s probably a mistake. If you have owned a business for 30 or 40 years, the loss of indexation will prove quite expensive.”
Meanwhile, tax expert Grant Thornton has predicted a rush of business sales ahead of 6 April 2008, when the changes are due to come into effect, and a downturn in private equity activity.
However, Europa Partners’ Nick Mockett said a downturn in the private equity sector, though likely, has more to do with the debt market.
Darling’s proposal, which would mean a virtual doubling of CGT taxation from 10% to 18%, has already faced stiff opposition from within his own party, as well as from the Conservatives.
Now, in an open letter to the Chancellor, the heads of the British Chambers of Commerce, CBI, Federation of Small Businesses and Institute of Directors, have urged Darling to “suspend [his] decision”.
In addition, printers such as Media & Print Investments (MPI) managing director Mike Dolan have expressed their outrage at the Government’s proposal.
Dolan said: “It’s an appalling mistake by Alistair Darling. There are an awful lot of owner-operators of companies, both printers and in other industries, who will undoubtedly suffer from it.”
Multigraphics managing director Gary Lasham said that the proposal would punish individuals, rather than the big “million-making” private equity firms.
He added: “It’s not a tax that’s going to hit the big private equity people. The tax will hit the private individuals who have risked their own money, sometimes their own homes, in order to create a business and create wealth. I think it’s absolutely bloody outrageous.”
Another controversial aspect of the Chancellor’s report was the proposed termination of indexation allowance, which takes into account inflation when calculating CGT.
Chief executive of CPI UK Mike Taylor said: “Obviously assets, by virtue of what they are, do go up in value simply by inflation. So, by eliminating indexation, one is being taxed on inflation. I think that’s probably a mistake. If you have owned a business for 30 or 40 years, the loss of indexation will prove quite expensive.”
Meanwhile, tax expert Grant Thornton has predicted a rush of business sales ahead of 6 April 2008, when the changes are due to come into effect, and a downturn in private equity activity.
However, Europa Partners’ Nick Mockett said a downturn in the private equity sector, though likely, has more to do with the debt market.
Source: printweek
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