Investors association calls for cuts to capital gains tax

25/02/2010

The British Private Equity and Venture Capital Association’s (BCVA) chief executive, Simon Walker, has written to the Chancellor to ask for a more stable, competitive tax environment for UK businesses.

The open letter is urging Alistair Darling to make changes to the tax system, particularly for capital gains. The letter says that the tax system should be stable and simple. It also calls for the system to offer more certainty to tax payers and be more competitive – to attract the best talent to register their companies in the UK and the best firms to relocate to the UK.

Walker says these changes are essential to ensure the UK retains and improves its reputation as the European centre for private equity, venture capital and entrepreneurship.

Walker claims that the new higher top rate income tax and increases to capital gains tax have meant the UK is struggling to keep this reputation. Further rate increases would put international investors off registering companies in the UK.

The letter also claims that further increases could actually reduce tax income for the government as transactions would be put on hold to avoid paying higher rate capital gains tax.