Private Equity and Small Business

Private equity plays a crucial role in the manner in which new entrepreneurs can shape their business and work at making it a success. And thus it is understandable that there is a growing concern in the manner in which the Government seeks to change its policy regarding Private Equity.

The British Chambers of Commerce (BCC) has expressed concern on the manner in which small business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer businesses, will be affected if the government decides to clamp down on capital gains tax relief.

BCC director general David Frost says,

“While the BCC recognizes the advantages private equity managers can take of capital gains taper relief to pay lower rates of tax, we worry that any knee jerk changes could have serious implications for the entrepreneurial culture embedded within our membership.”

Currently the capital gains policy supports budding entrepreneurs who utilize private equity for their businesses and create jobs. On its part the government maintains that it needs to take steps to make the private equity industry more open and transparent.

TUC general secretary Brendan Barber says, it wants the Treasury to review the tax paid by private equity investors, and calls into question the ease with which the super-rich can claim non-domiciled tax status.

The government policy with regard to Private Equity will have a deep impact on the manner in which business start-ups work and SMBs need to pay keen attention to it.

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