THE government must slash capital gains and abolish stamp duty on AIM trades in its Autumn Statement, the London Stock Exchange demanded yesterday, in order to boost growth among small and medium enterprises.
Cutting capital gains tax to 10 per cent, from the 18 or 28 per cent it currently stands at, combined with completely getting rid of stamp duty on trading in AIM shares, could lower the cost of capital for small enterprises by up to a quarter, according to research from Deloitte, published with the report.
In turn, lowering these costs could boost job growth by up to 38,000 – around a fifth of the total currently employed by AIM firms – Deloitte says. “Equity finance is the best type of funding for fast growing and entrepreneurial businesses, but the over-taxation of equity is stifling growth,” said London Stock Exchange boss Xavier Rolet. “This package of measures can kick start equity markets for existing firms and for the next generation of fast-growing businesses.”
Meanwhile, Ernst & Young’s Item Club this morning called for a £14bn infrastructure spend, claiming such a package could deliver a boost of around 0.5 per cent to GDP – without affecting the chancellor’s main fiscal target.