No time to prepare for CGT reforms, accountants warn

28/01/2008

The government has not given business owners enough time to assess the impact of Capital Gains Tax (CGT) reforms before the changes come in, it has been claimed.

Last Thursday, the chancellor announced a 10% tax rate for up to the first £1m of lifetime capital gains, dubbed ‘entrepreneur relief’. However, any business assets sold for over this threshold will be charged at 18% from 6 April 2008.

Frank Haskew, head of the Institute of Chartered Accountants in England and Wales’ (ICAEW) tax faculty, said Darling had not given taxpayers enough time to prepare for the new system.

He said: “Whilst we welcome the concessions to mitigate the impact on small businesses and entrepreneurs following the subsequent consultation with business bodies, we are concerned that this could put greater pressure on a tax system that is already struggling to cope.

“Taxpayers deserve better treatment than this. We urge the chancellor to listen to the tax profession and defer any changes to CGT until April 2009 so that individuals can make appropriate arrangements before the new regime comes in and he can consult properly on its implementation, rather than rushing it.”

The chancellor’s £1m concession has been subject to intense criticism from the entrepreneurial community since the announcement was made.

Duncan Cheatle, founder of entrepreneurs’ network the Supper Club, called the entrepreneur relief a ‘slap in the face for real entrepreneurs’.