Income shifting proposals "deeply unfair"

Alistair Darling's plans to introduce tax changes designed to eradicate 'income shifting' have been criticised by a small business organisation.

The Professional Contractors Group (PCG) has written to the chancellor about the issue and urged him to reconsider the taxation proposals before next month's Budget.

PCG managing director John Brazier described the new system, as envisaged by Mr Darling, as "deeply unfair" and a potential "nightmare for family businesses".

He stated: "This measure will impose a horrific burden on hundreds of thousands of small family businesses, which will make it impossible to self-assess tax bills with any certainty.

"The government has been encouraging people to set up businesses under joint ownership for years; now they are hammering the people who have followed their advice."

Under the proposed changes, business owners will no longer be able to make sharing income between family member part of their tax planning.

Mr Darling is set to deliver his first Budget as chancellor on Wednesday March 12th.