Government plans partial U-turn on captial gains tax

The Government is reportedly planning a partial U-turn on its controversial changes to capital gains tax, which have been fiercely opposed by the hospitality industry.

According to The Times, the Treasury is considering the introduction of tax relief of up to £100,000 for people who sell their businesses when they retire.

The move follows a wave of protest at the CGT changes, announced in the Pre-Budget Report, which proposed a flat capital gains tax rate of 18% to replace the existing tapered system that allows business owners to pay 10% tax when selling up.

Martin Couchman, deputy chief executive of the British Hospitality Association, has said that the increase would be an “absolute body blow” to the hospitality industry, while David Clarke, chief executive of hotels consortium Best Western said his 290 members were taken aback by the announcement.

The criticism followed protest from business groups the CBI, the British Chambers of Commerce, the Institute of Directors and the Federation of Small Businesses (FSB).

The FSB cautiously welcomed today’s news of a partial U-turn. Stephen Alambritis, spokesman for the Federation, said: “We will have to look at that £100,000, but it is a little detour on the way to what we would actually prefer, which is a whole U-turn.”

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By Daniel Thomas

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