THE CHIEFTAINS of some of the City’s most successful independent stockbrokers have thrown their support behind City A.M.’s campaign against the coalition government’s proposed hikes to capital gains tax (CGT).
Yesterday, Charles Stanley chairman and ex-Lord Mayor of London Sir David Howard said he applauded the campaign, claiming that it would be an “astonishing” move for the government to increase short-term CGT rates without the corresponding scaling down of tax on longer-term gains.
“Otherwise you are taxing savings twice, you are undermining the entrepreneurship that the government seeks to encourage, and you are taxing the effects of inflation,” Howard told City A.M.. “I think all taxable assets should be subject to the same uniform regime of a reducing scale of capital gains, with an additional boost for entrepreneurship by shortening the timescale for a clearly defined class of business assets.”
Oliver Hemsley, the chief executive of Numis, also signed up to the campaign. “Anything that proves a disincentive to entrepreneurs risking their capital should never be countenanced by the government,” Hemsley said. “It is such a mistake.”
They join a long list of their peers who have already pledged support, including Panmure Gordon chief Tim Linacre, Seymour Pierce boss Keith Harris and Brian Winterflood, founder of Winterflood Securities.
Business big-hitters such as Tullett Prebon boss Terry Smith, entrepreneur Luke Johnson, property mogul Nick Leslau and private equity veteran Jon Moulton have also backed City A.M. in calling for an alternative tapering CGT system. Under such a system, short-term gains would be taxed at 40 per cent, with the rate decreasing year by year to 30 per cent, 20 per cent, 10 per cent and possibly even to zero on gains after five years.