Many small business owners were relieved at the changes but more adventurous types expressed disappointment at the rise to £5m of the threshold for the 10 per cent capital gains tax tax rate, up from £2m previously.
They felt it would not help founders with ambitions to build companies that can be sold for hundreds of millions of pounds. Entrepreneurs had been hoping for more from a government claiming to support the country’s wealth creators.
Several expressed regret that the coalition did not reinstate the taper relief that Labour had introduced then discarded in the dying days of its administration.
Ed Wray, chairman of Betfair, the online gambling business, said it was not just founders such as himself who lost out but also staff who signed up to equity schemes at start-ups in order to share in any success.
Hundreds of Betfair employees who signed up for the company share scheme will now have to pay the higher rate of CGT because their stake in the business is less than 5 per cent and so does not qualify for entrepreneurs’ relief, Mr Wray said.
“This does not help when we are trying to encourage people to invest their time in a new business,” he said.
Nick Jenkins, chairman of Moonpig, an online greetings card retailer, who this month won Ernst & Young’s Entrepreneur of the Year prize for London and the south, said the rise might encourage some of his peers to move abroad.
“The only people who will benefit are estate agents in Geneva,” he said.
The rate increase for higher-rate taxpayers to 28 per cent means that the UK is now 15th in the global CGT league, according to the British Venture Capital Association, behind Germany, India and Spain.
Brent Hoberman, who founded Lastminute.com, the online travel business, in the 1990s, said George Osborne probably had little choice but it was “dispiriting” to know the UK’s rate was now only slightly better than that of France.
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