BVCA responds to June 2010 Budget

BVCA Responds to June 2010 Budget

In response to the Chancellor's emergency Budget, Simon Walker, Chief Executive of the British Private Equity and Venture Capital Association, said:

"The Budget as a whole is a brave package which will bring an age of fiscal fecklessness to an end. There are many tough measures included which will not be popular but are necessary if the credibility of the public finances in Britain is to be restored. The Chancellor must, however, take care to encourage a spirit of enterprise as well as ensuring budgetary discipline.

The sharp rise in capital gains tax will discourage investment in this country and leave the UK in an uncompetitive international position. This has to be the cause of deep concern. Entrepreneur's relief, as currently constituted, does not cover those involved in the investment chain that brings a new idea to the market and its scope should be reviewed by ministers. It would be of real value if the Chancellor made it clear that no further increases in this tax regime will be introduced in this Parliament. Certainty is the essential foundation for innovation. Without this, venture capital will be severely constrained by the creation of the new 28% rate."

FOR FURTHER INFORMATION PLEASE CONTACT

Simon Horner, BVCA:  +44 (0) 20 7420 1806

Note to editors:

1.       The British Private Equity and Venture Capital Association (BVCA) is the industry body for the UK private equity and venture capital industry. The BVCA has over 450 member firms, representing the overwhelming number of UK-based private equity and venture capital firms and their advisers.

2.       An increase in the rate in capital gains tax from 18% to 28% for non basic rate taxpayers moves the UK from 7^th place in a table of our international competitors to 15^th or second worst. Only France now has a higher rate of capital gains tax than the UK:

Headline Capital Gains Tax rates for individuals (Source: Ernst & Young.  Where relevant, a share holding of at least 12 months is assumed.)