HMRC 'will not keep records of CGT claims'

Date: 7th February 2008

The government's recent capital gains tax (CGT) reform has caused fresh controversy after it emerged that HM Revenue & Customs (HMRC) will not be checking up on taxpayers claiming Entrepreneurs' relief.

A spokesperson for the tax body has said that keeping records of such claims "would not be the best use of our resources", Thisismoney.co.uk reports.

Entrepreneurs' relief was unveiled by chancellor Alistair Darling last month when he bowed to extreme pressure from the small business community to modify unpopular changes to the CGT system. The relief grants people a lifetime capital gains allowance of £1 million on the sale of business assets.

Tax partner at Grant Thornton Mike Warburton called the HMRC's admission "extraordinary" and asked: "What is to stop someone claiming the relief again and again every time they sell a business?"

"It just shows how ill thought-out by the Treasury the relief has been," he added.

Mr Darling proposed a flat CGT rate of 18 per cent in his pre-Budget report last October but was forced to backtrack under pressure from business leaders.