Entrepreneurs tax relief blow

GOVERNMENT plans to axe tax relief for wealthy venture capitalists could backfire, according to a leading Sheffield City Region industrialist.

Master Cutler Gordon Bridge has written to Chancellor of the Exchequer Alistair Darling, warning him that abolishing taper relief on capital gains could hit hard working risk takers and some ordinary people who invest in share option schemes run by their employers.

Mr Bridge - a qualified accountant who has worked in manufacturing for 40 years – has told Mr Darling: "The introduction of taper relief was a bold move which encouraged many to start and build businesses and results have shown it was well worth the risk.

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"Those taking the real hit will be the many entrepreneurs who have risked their capital to grow successful, tax paying businesses offering employment to thousands.

"The new measures will, if implemented, act as a disincentive, not only to these much needed risk takers, but also to thousands of hard working employees who have invested in companies' share option schemes."

Mr Bridge, who is chief executive of AES Engineering, the Rotherham-based mechanical seals company, told The Star: "I have urged the Chancellor to think again about his proposed changes - and recognise the implications to so many other people who are not exploiting tax loopholes." Mr Darling announced in his Pre-Budget Report that he would abolishing the 10 per cent tax rate on capital gains made on investments held for more than two years.

The decision, due to be implemented in April, means there will be a single 18 per cent tax rate imposed on all capital gains.

Sheffield

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accountant Hart Shaw is urging small businesses to seek help and find out how the Pre-Budget Report affects them.

The company says plans to introduce supplementary business rates and changes to capital gains tax will hit many of the UK's 4.5 million small businesses.

Hart Shaw's Steve Vickers said: "Alistair Darling's first pre-budget report will have disappointed many entrepreneurs in South Yorkshire, which has become something of a hot bed for small businesses in recent years."

"If you were already considering selling your business now is the time to decide so that you can benefit from taper relief before it is abolished."