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Business unites against tax plans | |
(about 7 hours later) | |
The UK's four leading business lobby groups have urged Chancellor Alistair Darling to put on hold controversial proposals to reform capital gains tax. | The UK's four leading business lobby groups have urged Chancellor Alistair Darling to put on hold controversial proposals to reform capital gains tax. |
The groups, which include the CBI, have written a joint letter saying the plans will set back economic growth. | The groups, which include the CBI, have written a joint letter saying the plans will set back economic growth. |
Different rates of relief for different kinds of investment will be replaced with a single 18% flat-rate tax, in a move outlined in the pre-Budget report. | |
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. |
'Reverse gear' | 'Reverse gear' |
But the CBI, Institute of Directors, British Chambers of Commerce and Federation of Small Businesses said they were "deeply concerned" about the proposals and were seeking a meeting with Mr Darling to put forward their case. | But the CBI, Institute of Directors, British Chambers of Commerce and Federation of Small Businesses said they were "deeply concerned" about the proposals and were seeking a meeting with Mr Darling to put forward their case. |
They said the proposals, which they described as being "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 being "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." |
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