Capital gains tax "confusion" frustrates businesses

A new delay to the details of proposed changes to capital gains tax (CGT) has attracted criticism from business groups.

Chancellor Alistair Darling had indicated that he would publish full details of the plans, unveiled in his Pre-Budget Report, by the middle of this month. However, yesterday <a href=http://www.publications.parliament.uk/pa/cm200708/cmhansrd/cm071213/debtext/71213-0004.htm#07121353000004][target=_blank">he announced to Parliament[/url] that he would not be putting forward final proposals until the new year.

The chancellor's plans include abolishing the current system of taper relief on CGT. Business groups fear that this would increase the tax rate paid by entrepreneurs selling up their firms from 10% to 18%.

Mr Darling said that he had received a wide range of representations from organisations and individuals on the matter. "I think it desirable to have further discussions with those groups before I finalise my proposals," he said.

Responding to the additional delay, David Frost, director-general of the British Chambers of Commerce, said: "There appears to be confusion in the Treasury about the reforms that they are planning to make, leaving businesses in a state of flux over their taxes."

The Federation of Small Businesses criticised the "continuing uncertainty" for businesses. National chairman John Wright said: "This is not a good situation to be in and one that we had hoped would all be resolved by now."

However, he welcomed the chancellor's intention to hold further discussions, adding: "I look forward to meeting him again to discuss our proposals in detail."