Alistair Darling slapped down business demands for a U-turn on capital gains tax on Thursday, insisting the contentious pre-Budget report increase was “the right thing to do”.
Pressure on the chancellor to rethink continues to mount. In a letter in Friday’s Financial Times, 50 entrepreneurs – including Jason Gissing, the Ocado co-founder, and Tamara Mellon, founder of the Jimmy Choo shoe chain – call for the government to “listen to business before implementing this damaging measure”.
I have to admit I don't understand why the business is getting all het up about the change in the CGT. It has simplified the tax regime clearly. And if you do have to tax capital, then you might as well as do it at one rate.
But I wouldn't worry if I was Alastair Darling. Go for it, stick to the 18% tax rate. What did the business groups expect? that the rate will be reduced? Why? I mean, I am all for reducing the tax rate but then say that.
Demands for reducing tax rate are legitimate, but to say that it will impact entrepreneurs and people who want to sell their business doesn't stack up. You pay VAT, don't you? So if you don't squeal when there is value added tax on your products, why would you moan when the company which makes them is taxed when its sold?
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