Firms 'lose out' from delay on CGT verdict

News Article - 19 December 2007
Category: Regulatory

The chancellor's delay on a decision over capital gains tax (CGT) is not giving business owners enough time to react to the changes, it has been claimed.

Penny Bates, tax partner at Menzies chartered accountants, told the BBC that following the news that Alistair Darling will make his decision in the second week of 2008, many businesses face the prospect of losing out on taper relief before the changes are implemented on April 5th.

"One of the real problems this uncertainty has created is that business owners are now making decisions not for commercial reasons, which they are used to doing, but for tax reasons," she commented.

Ms Bates said that some firms believe the delay on the decision is a signal that the chancellor may reduce the proposed 18 per cent flat rate on the tax.

She concluded that in order to show he has taken business lobbying into consideration, he may even postpone his decision until 2009.

Research by the Confederation of British Industry revealed that 36 per cent of equity holders have abandoned plans to invest more money in business, following Mr Darling's CGT proposals.

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