Feeds

Darling backtracks on CGT

Expected to make concessions for small biz

The next step in data security

Updated The chancellor Alistair Darling is today expected to make a U-turn over plans to bring a single rate of capital gains tax (CGT) into play, following pressure from small business (SMB) lobby groups that deeply opposed the reform.

Darling looks set to announce in the Commons later today that the government will introduce a lower tax rate for entrepreneurs.

It's not known what the new lower rate will be, though a number of reports suggest that it will be near to the figure the Federation of Small Businesses had been pushing for. The group campaigned for a special rate of nine per cent on the first £750,000 worth of gains over a lifetime.

The tax overhaul, which was announced in the chancellor's pre-budget report in October last year, called for taper relief - that reduces CGT on a sliding scale from 40 per cent to 10 per cent - to be scrapped in favour of a flat rate set at 18 per cent, to be brought in from April 2008. The change was met with fury by many business groups.

Darling isn't expected to make any other concessions to the reform today, with taper relief still looking likely to be axed under the reform. But many will undoubtedly see the government's change of heart as a humiliating climbdown.

He had hinted at the Confederation of British Industry (CBI) conference in November last year that the Treasury could reconsider some elements of the reform – Darling conceded at the time that he was "open to suggestions".

But he also defended the policy, saying that the UK would still have one of the lowest rates of CGT in the world, and that the reform would simplify the tax system. ®

Update

Darling told the Commons earlier today that CGT rate on profits below £1m made by anyone flogging all or part of a business would be slashed to 10 per cent.

Dubbed Entrepreneurs' Relief, the chancellor said that an estimated 800,000 small biz owners and investors would be eligible for the reduction on disposal of their business assets.

He also put a price tag of around £200m per year to implement the changes.

The Chartered Institute of Taxation (CIOT) welcomed the government's relaxation of the reform but also highlighted the need for Darling to work more closely with the business world.

CIOT president Rob Ellerby said: "If there is one lesson to come out of the CGT saga, it is the importance of consultation with those affected. In taxation, the only time that change should come before consultation is in the dictionary."

Security and trust: The backbone of doing business over the internet

More from The Register

next story
Hey, Scots. Microsoft's Bing thinks you'll vote NO to independence
World's top Google-finding website calls it for the UK
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Apple CEO Tim Cook: TV is TERRIBLE and stuck in the 1970s
The iKing thinks telly is far too fiddly and ugly – basically, iTunes
Israeli spies rebel over mass-snooping on innocent Palestinians
'Disciplinary treatment will be sharp and clear' vow spy-chiefs
Huawei ditches new Windows Phone mobe plans, blames poor sales
Giganto mobe firm slams door shut on Microsoft. OH DEAR
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
OECD lashes out at tax avoiding globocorps' location-flipping antics
You hear that, Amazon, Google, Microsoft et al?
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
Security and trust: The backbone of doing business over the internet
Explores the current state of website security and the contributions Symantec is making to help organizations protect critical data and build trust with customers.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.