Capital Gains Tax reforms - comment from Direct Line for Business

Commenting on the Capital Gains Tax reforms announced in today's Budget, Kate Syred, head of Direct Line for Business said:

"While it is disappointing to see the abolition of an effective taper relief system for a controversial single flat rate, the Government's response to the concerns of the small business community with the introduction of the 'entrepreneur relief' is a step in the right direction.

The 10 per cent tax rate on gains up to £1 million should hopefully provide some means of protecting Britain's small businesses and encouraging entrepreneurialism among aspiring business owners.

"The reforms, however, have caused a lot of confusion and uncertainty within the small business community, and businesses with gains over £1 million wanting to sell up and lock in 10 per cent before April have been given a very short timeframe to do so.

Direct Line for Business' research among over 600 small business owners found that 34 per cent of small business owners admitted they weren't aware of the proposed changes following the pre-budget announcement in November 2007, and 26 per cent did not understand what it meant for them.

Changing regulation and legislation worries over a quarter (28 per cent) of small business owners, so it is important such changes are communicated effectively.".

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