11-10-2007
SMEs react to pre-Budget report
News from Simply Business - independent providers of business insurance, business finance, landlords insurance, buy-to-let mortgages, commercial mortgages & information for small businesses.
The new capital gains tax rate introduced in Tuesday's pre-Budget report is causing wide-spread concern among small and medium sized businesses, according to experts.
Plans to introduce a new 18 percent flat-rate capital gains tax have been widely criticised by business groups, as it is expected to have a negative impact upon a number of groups including SMEs looking to sell their businesses and investors.
It is also believed that employees and business start-ups will be affected, according to the Financial Times. "We all know this report was brought forward so it could be the starting gun for the campaign - before the prime minister took the pistol and fired it at his foot," said George Osborne, shadow chancellor.
John Cridland, deputy director general of the Confederation of British Industry went further, noting the move would "adversely affect the balance between risk and reward, both for entrepreneurs and for the UK's vital private equity industry".
However, the higher tax has been announced in an effort to impose further constraints on those private equity executives able to derive a significant income from their activities.