Entrepreneur attacks tax hike plan
by David Coates
Published on Thu May 13 08:58:35 BST 2010
A Lancashire entrepreneur has blasted plans by the new Conservative-Liberal Democrat to hike Capital Gains Tax.
Marcus Simmons, founder of Leyland-based holiday accommodation web portal i-knowuk, warned the rise would hit investment and put entrepreneurs off starting their own companies.
The coalition has confirmed that rates CGT will be raised from its current flat rate of 18 per cent to rates “similar or close to those applied to income”, although no detail has yet been given.
Mr Simmons said he was more concerned about this plan than the “jobs tax” in National Insurance Contributions (NICs), which was a central part of the election campaign.
He said: “As an entrepreneur you work extremely hard and make extreme sacrifices to create a successful business, which pays taxes and employs people who also pay taxes.
“You do this because at some point you hope to be rewarded by selling your stake in the business – so making a significant and well-earned capital gain.
“This should be encouraged by the government as it is what makes our economy grow. If entrepreneurs are treated the same as fat cats and bankers who wreck the economy then what is the incentive to work hard and grow a business in a way that benefits the economy?”
He warned that the changes would also hit management teams which could be handed part of their employer’s share value as an incentive to grow the business.
Mr Simmons said: “I believe in a fair society and a fair tax system is fundamental to that, so lets make sure that genuine hard work and wealth creation is rewarded and not penalised.”
Tax expert Stephen Hunter, of finance firm KPMG’s office on Preston docklands, said the planned rise would be used to fund changes in income tax enforced by the Liberal Democrats.
He said: “This is one of the most radical proposals is to increase CGT from 18% to rates “similar or close to those applied to income” for non-business assets and the revenue from the tax rise will be used to fund a significant increase in the income tax threshold to help the low-paid.”
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