London, England, UK. 16th Oct, 2024. Chancellor of the Exchequer RACHEL REEVES is seen in Westminster as UK inflation fallss unexpectedly to 1.7% in the year to September, the lowest rate in three-and-a-half years. (Credit Image: © Tayfun Salci/ZUMA Press Wire) EDITORIAL USAGE ONLY! Not for Commercial USAGE!London, England, UK. 16th Oct, 2024. Chancellor of the Exchequer RACHEL REEVES is seen in Westminster as UK inflation fallss unexpectedly to 1.7% in the year to September, the lowest rate in three-and-a-half years. (Credit Image: © Tayfun Salci/ZUMA Press Wire) EDITORIAL USAGE ONLY! Not for Commercial USAGE!

London, England, UK. 16th Oct, 2024. Chancellor of the Exchequer RACHEL REEVES is seen in Westminster as UK inflation fallss unexpectedly to 1.7% in the year to September, the lowest rate in three-and-a-half years. (Credit Image: © Tayfun Salci/ZUMA Press Wire) EDITORIAL USAGE ONLY! Not for Commercial USAGE! (ZUMA Press, ZUMA Press, Inc.)

As Labour’s first budget draws ever closer, campaigners and think-tanks are ramping up calls for how they think the government should approach possible changes to capital gains tax (CGT), with research on what effect changes might have on entrepreneurship.

UK CGT is currently set at 20% on most assets. The Guardian newspaper reported last week that chancellor Rachel Reeves is considering raising CGT as high as 39% in the budget.

Earlier this week, The Entrepreneurs Network (TEN) urged business owners to sign an open letter calling for consideration of their views on potential changes to business asset disposal relief (BADR) and CGT.

“Higher CGT or any restrictions on BADR would make this relief less competitive at a time when the rest of the world is making their reliefs more competitive,” the open letter said. “It would mean the UK has the second-highest CGT rate in Europe, and jeopardise the success of our country’s startup ecosystem by enormously weakening the incentive individuals have to build businesses.”

“Any revenue [a CGT rise] might raise in the short term would be more than offset by the damage it does to long-run productivity by stifling the growth of future startups,” added Philip Salter, the founder of TEN, in a LinkedIn post.

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