Darling backs down amid CGT controversy

Alistair Darling has announced a modified version of his capital gains tax (CGT) reform in the face of mounting pressure from the UK business community.

Business leaders and owners of small firms in particular had been up in arms over the chancellor's proposal to abolish the ten per cent taper relief and establish a flat CGT rate of 18 per cent.

However, Mr Darling attempted to keep the business world on his side today by unveiling a number of concessions for the tax which deviate significantly from the plan which he first announced in last October's pre-Budget report.

Under the new "entrepreneur's relief" revealed by the chancellor, entrepreneurs and sole traders will pay just ten per cent tax on capital gains up to the first £1 million, instead of the 18 per cent originally suggested.

This concession will be available to owners or investors with a minimum business stake of five per cent.

Commenting on Mr Darling's position, Liberal Democrat shadow chancellor Vince Cable said: "The chancellor's climb-down on CGT reform was inevitable and is a stark demonstration of the pitfalls of making up tax policy over a weekend."

TaxAssist Accountants focus their accountancy and tax skills specifically on small businesses and taxpayers in the UK.