The government is set to unveil details of its proposed changes to capital gains tax (CGT), amid reports of concessions after business criticism.
The government has announced changes to capital gains tax (CGT), confirming that it will set a single 18% rate and cease taper relief from April 1.
Business leaders still expect ministers to scrap CGT taper relief from 1 April 2008 and set a single 18% rate.
But Chancellor Alistair Darling also said there would be a 10% rate on gains of up to £1m, to help entrepreneurs.
But the government is also tipped to halve the rate to 9% on gains of up to £750,000, to help small firms.
Plans for a single tax rate sparked strong criticism from industry groups and small firms who said it would hamper new businesses.
Chancellor Alistair Darling first announced changes to CGT in October's pre-Budget report.
The Chancellor first announced changes to CGT in October's pre-Budget report.
'Entrepreneurial activity'
'Entrepreneurial activity'
At recent talks with business leaders, ministers were quoted as saying the 10% rate would still go up to 18% this April.
Plans to raise the rate previously met with fierce criticism from the Institute of Directors, the CBI and the Federation of Small Businesses.
Plans to raise the rate met with fierce criticism from the Institute of Directors, the CBI and the Federation of Small Businesses.
Small business owners, especially those who had hoped to sell their firms and use the proceeds in retirement, have been especially annoyed.
Small business owners, especially those who had hoped to sell their firms and use the proceeds in retirement, have been especially annoyed.
The Federation of Small Businesses told the BBC that the "whole episode has been a mess".
The Federation of Small Businesses told the BBC that the "whole episode has been a mess".
But the BBC has been told by sources that ministers have been "actively considering how to help genuine entrepreneurial activity" and want to mitigate the impact on entrepreneurs nearing retirement.
'Deeply disappointed'
'Deeply disappointed'
Taper relief currently allows some higher rate taxpayers to pay as little as 10% CGT on profits from the sale of assets in any unlisted company or publicly-listed firm they work for, as long as they have held them for two years.
Taper relief currently allows some higher rate taxpayers to pay as little as 10% CGT on profits from the sale of assets in any unlisted company or publicly-listed firm they work for, as long as they have held them for two years.
It can also reduce the CGT liability for some basic rate taxpayers to 5%.
It can also reduce the CGT liability for some basic rate taxpayers to 5%.
Miles Templeman, director general of the Institute of Directors said: "It is clear that the government is not going to change the core of its proposals to modify capital gains tax. We are going to see a single rate, with no taper relief.
"We are deeply disappointed but not surprised. The government's stance implies that there will still be a substantial tax increase which is bound to damage business."
Firms have criticised Mr Darling for failing to reach a decision on CGT earlier, saying this has added to uncertainty and made financial planning hard.
Firms have criticised Mr Darling for failing to reach a decision on CGT earlier, saying this has added to uncertainty and made financial planning hard.
The changes would mean private equity bosses, who have made fortunes from buying and selling companies, will no longer be able to pay just 10% on their profits.
The changes would mean private equity bosses, who have made fortunes from buying and selling companies, will no longer be able to pay just 10% on their profits.
But critics said it also meant budding entrepreneurs could be put off, while existing small business owners described the changes as "potentially ruinous".
But critics said it also meant budding entrepreneurs could be put off.
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Are you a small business owner? What do you think of these changes? Send us your comments using the form below:
