FSB: Capital gains tax uncertainty continues for small businesses

The Federation of Small Businesses (FSB) has criticised the continuing uncertainty over changes to capital gains tax (CGT), following an appearance in the House of Commons by the Chancellor Alistair Darling to reveal he would not be announcing revisions to his Pre-Budget Report (PBR) until the New Year.

The UK’s biggest business organisation has proposed its own changes to the PBR and had been expecting the Chancellor to respond this month to end the crippling uncertainty that thousands of business owners are facing over whether to sell their businesses before taper relief on CGT is abolished in April 2008.

But the FSB welcomed the news that the Chancellor would again meet with the FSB and the other business organisations.

John Wright, FSB National Chairman, said:

“We are still no clearer on what will happen with the tax arrangements for millions of small business owners and entrepreneurs come April next year.

“This is not a good situation to be in and one that we had hoped would all be resolved by now.

“But at least the Chancellor appears to be taking our opposition to the PBR and our proposals for changes to it seriously. I look forward to meeting him again to discuss our proposals in detail.”

ENDS

Notes to Editors:

1. On October 9 2007 the Chancellor announced in his Pre-Budget Report that he intends to abolish taper relief on capital gains tax in April 2008, a measure which would increase the tax bills on small business owners selling their businesses to pay for their retirement by at least 80 percent. In addition, investors in small businesses and business angels would also be hit hard.

2. The FSB commissioned Ernst & Young’s Chris Sanger, the original architect of the capital gains tax (CGT) taper relief scheme, to come up with alternatives to the plans to abolish it. More information is available here: http://www.fsb.org.uk/documentstore/filedetails.asp?id=385.

3. The FSB is Britain’s biggest business organisation with over 210,000 members. It exists to protect and promote the interests of the self-employed, and all those who run their own business. More information is available at www.fsb.org.uk.

Contacts:

For interviews with FSB Chief Spokesman Stephen Alambritis or other senior FSB personnel please contact the FSB Press Office.

FSB Press Office

Simon Briault: 020 7592 8128 / 07917 628998

Belinda Webb: 020 7592 8121 / 07825 125 695

For regional FSB contacts please go to www.fsb.org.uk/regions