Darling still in tax talks
Thursday, 13 Dec 2007 13:35
Chancellor confirms final details of controversial plans to reform capital gains tax will not be released until new year
Chancellor Alistair Darling has confirmed he is still in talks with business leaders over controversial plans to reform capital gains tax.
Industry bosses have claimed Mr Darling's proposal to scrap taper relief for capital gains tax will discourage long-term investment and risk-taking, but the chancellor has insisted the change is necessary to simplify the tax system.
Speaking in the House of Commons today, Mr Darling confirmed "helpful discussions" had taken place with business representatives, but said final proposals over the plans would not be announced until after the new year.
During a speech to the Confederation of British Industry's (CBI) annual conference at the end of last month, the chancellor had said he expected to publish final details of the reforms within weeks.
But Mr Darling, who said today he had received a wide range of proposals from business groups over the planned changes, confirmed he would not make an ultimate announcement over the reforms before Christmas.
His comments were made during a Commons statement which came at the request of the Liberal Democrats.
The party's acting leader, Vince Cable, accused the chancellor of planning to brief key industry organisations about his intentions before making a parliamentary announcement and claimed Mr Darling had made a "very serious error" in failing to consult more widely with businesses before unveiling the planned reforms in October's pre-Budget report.
Mr Cable said the failure had generated an "enormous amount of ill will" towards the government within the business community.
Under the chancellor's plans different rates of relief for different kinds of investment would be replaced by a single flat-rate of capital gains tax of 18 per cent - with the change set to come into force from April next year.
In November, a report by parliament's Treasury select committee warned the proposals could have a "detrimental" effect on small firms, with the Federation of Small Businesses (FSB) having claimed the reforms will hit the owners of small enterprises who are nearing retirement and wish to generate cash for their old age by selling their investment.
Responding to today's statement by the chancellor, FSB national chairman John Wright expressed disappointment at ongoing uncertainty over the proposed changes, but said the organisation was pleased Mr Darling appeared to be taking its opposition to the reforms "seriously".