Businesses in ‘complete confusion’ over capital gains uncertainty

The director general of the Confederation of British Industry (CBI) has publicly criticised the Chancellor’s failure to clarify possible changes to capital gains tax (CGT).

Speaking to the BBC, Richard Lambert said many UK entrepreneurs were considering selling firms as a result of the ongoing uncertainty over CGT, and described the industry as being in a ‘state of complete confusion.’

Chancellor Alistair Darling was due to make a statement on the controversial tax reforms within three weeks of the CBI conference last November. The Treasury later revealed this would be delayed until early in the New Year.

The 18% flat rate is due to come into effect in April, yet the Chancellor has yet to issue a statement clarifying the situation.

According to the CBI chief, business owners are finding it difficult to make judgments on the future of their investments as a result of the Treasury’s silence.

Entrepreneurs ‘are beginning to take decisions that have nothing to do with business or economic common sense. They are doing it because they don’t know what their tax liabilities are going to be,’ said Mr Lambert.