Small businesses win U-turn over CGT plans

Business leaders have welcomed the government's U-turn on its plans to introduce a flat rate for capital gains tax (CGT) from April this year, following an outcry from small business owners.

In last year's Pre-Budget Report the Chancellor Alistair Darling announced a flat rate of CGT at 18 per cent, abolishing taper relief and leaving many small business owners facing massive tax rises from April.

Industry bodies including the CBI, British Chambers of Commerce, Institute of Directors and Federation of Small Businesses (FSB), had attacked the decision, arguing that it would hit small businesses and entrepreneurs, rather than the private equity firms it was designed to target.