Companies will be forced abroad as result of the government’s decision to abolish capital gains tax (CGT) taper relief, a survey has claimed.
Over a quarter of businesses surveyed, by AngelNews, felt the decision to replace CGT with a single flat rate of 18% had made the UK such an uncompetitive environment and are now actively considering moving their businesses overseas. A fifth plan to sell their businesses before the changes are put in place in April 2008.
Raising growth finance will also be tougher, according to those questioned. Nine out of ten owners surveyed believed business angels would be less willing to invest, while three quarters felt the UK’s venture capital market would be adversely affected.
Modwenna Rees-Mogg, managing director of AngelNews, said business owners felt let down by the government. “Many feel it is a slap in the face. They work hard, they take salary sacrifices and now they will be affected by the government’s decision to increase capital gains tax. They feel the government has given up on them, and many have changed their political views.”
Rees-Mogg added that the government needed to act quickly or face completely alienating UK businesses. “The government needs to do something to show they support small businesses, because they are quickly losing faith.”
© Crimson Business Ltd. 2007
