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A David Cameron-led government would reverse the inflated tax rate on small business owners whose annual profits are under £300,000, it emerged yesterday. Speaking to a group of entrepreneurs, George Osborne, the shadow chancellor, said his party would scrap a £50,000 investment scheme to pay for lower corporation tax. The Tories believe small companies would prefer lower headline taxes instead of having to apply to retain cash they spend on equipment, as the scheme proposes. Accountants have raised questions about the benefits of the incoming allowance, according to the Daily Telegraph, as have micro business lobbyists like the PCG. The UK trade group for freelancers has said offering an annual allowance of £50,000 for investment in specific machinery suggests all companies wish to expand. “Yet this fails to recognise that many businesses do not wish to grow: not all B&Bs want to be the next Hilton chain, and not all one-person consulting company wants to be the next KPMG,” the PCG said. Also helping the Tories reposition themselves as the traditional party for enterprise is their pledge to vote down the Finance Bill, legislation which would action a hike to capital gains tax, from April. In fact, the meeting Mr Osborne addressed was called to discuss the 80% increase to CGT, which this week unified all four of the UK’s main business groups in opposition. For only the third time in 17 years, the CBI, the British Chambers of Commerce, the FSB and the Institute of Directors joined forces to protest about a single issue. But after listening to their concerns, Alistair Darling made clear there was little, if any, room for manoeuvre on scrapping the 10% rate of capital gains tax on business assets held for two years. The Financial Times also reported the chancellor was left in no doubt about the reaction to his Pre-Budget Report, with one person at the meeting saying the talks were “cordial, rather than friendly.” Government insiders told the paper that business might see “marginal” changes to the CGT decision, but reportedly ruled out any reinstatement of the taper relief or indexation allowances. Mr Osborne said: “It’s time Alistair Darling faced up to the fact that his report was badly thought through and damaging to business. He should have the courage to make the U-turn on CGT.” Oct 24, 2007 Email this article Printer friendly page Previous Page
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