The government has unveiled modifications to stamp duty rules.

From December the duty will be charged at one per cent on leases with a net present value in excess of the £150,000 threshold.

A spokesman for the Treasury told ePolitix.com: "The reforms were announced in the Budget and were designed to tackle tax avoidance in large commercial property transactions.

"Sixty per cent will pay less tax as a result of the reform."

David Laws, Treasury spokesman, said: "This is yet another backdoor tax rise from a chancellor desperate to claw in revenue to hide his burgeoning budget deficit."

Forum Response: British Retail Consortium

Bill Moyes, director general of the British Retail Consortium, told ePolitix.com: "This is terrible news for retailers many of whom will still be facing up to eight-fold increases on their stamp duty bill. There is also little comfort for small retailers and business start-ups due the upfront nature of the tax.

"We are very disappointed that the chancellor did not seize the opportunity to simplify the process and give real assistance to already squeezed small and medium-sized retailers. The measures announced today are totally contrary his own stated aims of promoting entrepreneurship and business expansion.

"This scale of tax increase on business will have serious consequences for competitiveness for UK high streets. The chancellor seems set to hurt the very businesses he needs to encourage to deliver on the urban regeneration agenda."

Forum Response: Royal Institution of Chartered Surveyors

A spokesman for RICS told ePolitix.com: "The chancellor's statement on new lease duty proposals yesterday represents a disappointment for business tenants.

"Lease duty will be paid on the value of rent payments over the lifetime of a lease, rather than on the average annual rent (the current system).

"This will significantly increase stamp duty for many new tenants of commercial properties from 1 December 2003."

Forum Response: Institute of Directors

Derek Brownlee, tax executive at the IoD, told ePolitix.com: "Although it's the taxation of leases under Stamp Duty Land Tax (SDLT) that is currently the most high profile area of concern, there are other aspects of this new tax which have the potential to hit business hard: it's a very different regime to the one business is used to.

"The proposal to charge SDLT only on that portion of the Net Present Value of a lease that exceeds £150,000 is better than the original plan, but the hard fact is that most bills will still be much higher than under Stamp Duty. It looks more like a gimmick than a serious attempt to deal with the genuine concern businesses have about the looming tax rise."