Rapid responses

Capital gains

[Re: Osborne must now face up to his fiscal failings, yesterday]

As the chief executive of a UK-based small-to-medium sized business (SMB), I urge George Osborne to lay out a clear plan that would support business over the long term, and therefore kick start Britain’s economy. SMBs account for the vast majority of private sector companies in Britain, and are playing a major role in reviving the economy. Yet with the current tight debt market, and extremely high capital gains tax rates compared to countries like the US, some companies will struggle to get the capital they need to grow and prosper. We need new policies to drive competition and restore vibrancy to Britain’s banks so that it’s easier to access growth capital when we need it most. We also urge the government to lower capital gains tax rates to 18 per cent (or less) to incentivise investment and drastically increase our ability to compete on a global scale. This is vital. Investors who are willing to invest their capital take a risk because they believe in a business or management team. They should therefore be allowed to make a return on this investment, and not be harmed by uncompetitive capital gains tax. SMBs account for 59.1 per cent of private sector employment. Tax revenues from their expansion will outweigh any nominal gain that can be achieved from artificially high capital gains rates.

Jeff Hughes, chief executive of Omnifone

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