Press Release

FSB welcomes Treasury Select Committee comments on CGT

26 November 2007

The Federation of Small Businesses (FSB) has welcomed the Treasury Select Committee’s criticisms of the Pre-Budget Report, which dealt a major blow to small businesses by abolishing taper relief on capital gains tax (CGT).

The Treasury Select Committee criticised the lack of consultation by the Government on the proposed plans to abolish taper relief and replace it with a flat rate of CGT of 18%. The Committee also called for the Government to set out how it proposes to mitigate the effects of the reforms of CGT, particularly the effects of the withdrawal of taper relief for small businesses.

The FSB has been vocal in its criticism of the proposed changes to CGT, arguing in meetings with the Chancellor of the Exchequer Alistair Darling that the changes would jeopardise the UK’s hard-fought reputation for entrepreneurial competitiveness and hit the UK’s 4.5 million small business community hard. Many small business owners sell their businesses to pay for their retirement and now face an unprecedented increase in their tax bill.

John Wright, FSB National Chairman, said:

“The Treasury Select Committee has today confirmed what everybody already knew: that the proposed changes to CGT were ill-thought through, ruinous for small businesses and damaging to the UK economy.

“The Chancellor must now clarify the process for consultation that he should have carried out before the Pre-Budget Report.

“Small business owners, particularly those considering selling their businesses to pay for their retirement, need to know where they stand so they can plan ahead.”