Treasury 'failed' to consult business

News Article - 17 October 2007
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The Treasury has admitted that it did not discuss its plans for the capital gains tax system with the business community.

Officials from the Treasury told a parliamentary hearing that they did not "formally consult" with businesses, Thomson Financial reports.

However, the officials told the Treasury committee that there had actually been a "debate in the country" about possible changes to the system.

In his pre-Budget report, chancellor Alistair Darling announced that the tax system would be amended to create a new flat rate of 18 per cent for capital gains, removing certain tax reliefs.

The move was criticised by the Confederation of British Industry (CBI), which argued that it would discourage the country's entrepreneurial community.

Richard Lambert, director general of the CBI, said that the move undermined the government's efforts to promote "enterprise and risk-taking" in business over the last decade.

Mr Lambert said removing taper relief could have serious consequences for the economy.

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