CBI labels CGT reforms "crackers"

Head of the Confederation of British Industry (CBI) Richard Lambert has said that proposed changes to capital gains tax (CGT) payments could have a serious impact on the nation's business community.

Discussing the issue on BBC Radio 4's Today programme, the director general also claimed that the government's delay in finalising the reforms had left the business world in "a state of complete confusion", Accountingweb.co.uk reports.

Mr Lambert commented on the likely effect of the changes on small business owners, stating: "They are beginning to take decisions that have nothing to do with business or economic common sense.

"They are doing it because they don't know what their tax liabilities are going to be."

He also said that it was "completely and utterly crackers" that, under the new system, people such as buy-to-let investors will have the same tax level as those who have built a successful business up from scratch.

Chancellor Alistair Darling's plans for CGT, revealed in last October's pre-Budget report, involve abolishing taper relief and establishing a flat rate of 18 per cent.