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North East offers cautious welcome to Darling's relief

Yesterday saw the Chancellor set out plans to ease the burden of his controversial capital gains taxes changes on small businesses. Although Alistair Darling confirmed that the government will set a single 18% rate and cease taper relief from 1 April, he also outlined a new “entrepreneur’s relief” providing a special 10% tax rate for up to £1m of gains. The special rate for small businesses was welcomed by most commentators in the North East, but the timing was not.Â

Ross Smith, head of policy at the North East Chamber of Commerce (NECC), said: “We have to give Alistair Darling credit for having the honesty to admit he got this horribly wrong. We welcome the changes he has made to prevent this untenable burden on smaller businesses but believe he could and should have gone further. “This whole affair has been a shambles from start to finish. Businesses owners that were considering selling their firms have been kept in limbo for three months. A final announcement this close to April is a poor state of affairs.”

Graham Redman, partner and head of tax, PricewaterhouseCoopers LLP in Newcastle, said: “If the government is committed to simplifying the UK tax system, it must work with business to implement a long term strategic tax policy framework. Business will then have more confidence to plan ahead and in turn be more welcoming to future, planned changes to the tax system. Without this, the UK will struggle to achieve its potential as a true enterprise economy.”

The Confederation of British Industry (CBI) was even less happy with the result. Director-General Richard Lambert called the whole process “badly handled”, and said that the wait had been “interminable”.

Sarah Green, CBI North East Regional Director, said: “Business in the North East will be disappointed with this outcome. The region is working very hard to develop an enterprise culture, but we need a tax regime that is truly supportive to help businesses start and grow over the long term. But after three months of uncertainty, and as business faces a difficult 2008, today’s changes may provide little comfort.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .