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Concession on capital gains tax not enough

From The Publican

By James Wilmore , 02-Nov-2007

Business groups are refusing to give up their campaign against the government over planned changes to capital gains tax, despite reports of a concession.

Chancellor Alistair Darling last month revealed plans to abolish taper relief on capital gains in favour of a flat rate of capital gains tax of 18 per cent.

Many licensees, who have worked hard on building up their business and planned on selling them to fund their retirement, will be hit hard by the changes due to come in next April.

However, following fierce opposition Alistair Darling is reported to be considering granting £100,000 in tax relief to business owners who sell up and retire.

Despite this, business leaders feel the proposals do not go far enough, with small business owners still facing a flat rate of 18 per cent - an increase of 80 per cent for most.

Stephen Alambritis, head at parliamentary affairs at the Federation of Small Businesses, said the speculation was "a little detour, but we are still looking for a U-turn."

He added: "For a publican coming up to retirement, with a freehold or leasehold, £100,000 would not be enough to make up the deficit if the flat rate was 18 per cent. The figure would need to be a lot higher."

David Frost, director general of the British Chambers of Commerce, said: "This proposal goes someway to meeting our concerns in that it will help those business owners that are seeking to retire.

"However, there is a wider concern in that the serial entrepreneur, those that build businesses, will still be hit by the proposals to have a higher single rate of 18 per cent. This will damage the entrepreneurial culture in the UK."