ACS

UK entrepreneurs are considering selling firms because of uncertainty over changes to capital gains tax (CGT).

Business leader Richard Lambert, director-general of the Confederation of British Industry (CBI), has said that Industry is in a "state of complete confusion". He said that he believes the chaos currently surrounding CGT has severely damaged the government's reputation.

Chancellor Alistair Darling announced CGT changes in October but has delayed revealing details of the new rules. At the CBI conference last November, the chancellor said he would announce revised proposals within three weeks, but so far there has been no statement from the Treasury on the subject.

It means that entrepreneurs are unsure whether to sell assets now, to take advantage of the current 10% rate, or wait and risk paying more tax later in the year.
Richard Lambert said: “Companies and entrepreneurs are finding it impossible to make rational decisions on their investments and disposals.

"If you have been building up a business over donkeys years and you suddenly face the prospect of a higher tax bill, you have to think now about whether you're going to get out of it. That's what people are doing, they are beginning to take decisions that have nothing to do with business or economic common sense. They are doing it because they don't know what their tax liabilities are going to be."

He added that the changes would bring a lot of "injustice" to many people, and that there needed to be a greater period of adjustment.

ACS continues to press Government to reconsider its decision, working with colleagues across the business community.

More information on CGT is available in the ACS advice pages