Concerned Business Leaders to Meet Darling

From April next year the government plans to impose a flat 18% charge on capital gains across the board. Until now the system has been a little more complex with companies having to pay between 10% and 40% depending on the nature of their assets.

Last week the Confederation of British Industry (CBI), the Institute of Directors, the British Chamber of Commerce and the Federation of Small Businesses said in an open letter to the Chancellor that they were "deeply concerned" about the proposed reforms.

They expressed their concern that the proposals would hit small businesses badly, and would damage long term investment in the UK.

In the letter the head of the CBI, Richard Lambert, said that the proposed reform "undermines the 10 year effort by this government to promote enterprise and risk-taking within the UK."

"We look forward to a constructive meeting with the Chancellor to discuss his changes to capital gains tax which have caused real concern amongst the business community," Lambert said today.

The Chancellor claims the plans will simplify the current system and that it will make private equity firms pay fairer taxes.