SME NewsTaper Relief – Tax Efficiency Issue For SMEs
FSB warns that changes to taper relief could harm entrepreneurial growth.
The Federation of Small Businesses has today warned that changes to taper relief designed to ensure private equity firms are taxed appropriately could inadvertently harm small business growth.
Taper relief, introduced in 1998, reduces the proportion of the capital gain which is taxable based on the length of time an asset has been owned. This can prove an extremely valuable tax benefit to growing businesses, but some have seen it as being abused by private equity firms.
Bill Knox, FSB Tax Chairman, says:
The moves to change tax policy on gains from private equity may also be counter-productive. Few of the people who currently earn large amounts from private equity are domiciled for tax purposes in the UK anyway. But small businesses generate fifty per cent of UK GDP and do pay tax in the UK.
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[…] mentioned here last week, changes to taper relief on capital gains designed to curb the excesses of private equity firms […]