BVCA responds to Chief Secretary to the Treasury
Responding to reports of the speech that Danny Alexander, Chief Secretary to the Treasury, is due to deliver to the Liberal Democrat conference today, Tim Hames, Director General of the BVCA, said:
“The BVCA through its Tax Committee and other vehicles has been in continuous dialogue with the Treasury and HMRC on this issue of loans made by private equity partnerships. This matter which Danny Alexander refers to today is not a ‘loophole’ as reported in some quarters but a well established set of rules. These are straightforward commercial transactions – they are not structures designed to enable individuals to avoid tax. It is strange then to hear them entering the public arena in the language of newly discovered tax avoidance. This is party conference politics, pure and simple.
The Government is of course, entitled to amend or end such arrangements as it wishes. What it may discover, however, is that this is not a black and white question but a far more complicated matter with implications that extend well beyond the private equity industry. This is about legitimate commercial logic, not ‘avoidance’.
The BVCA therefore welcomes the period of informal consultation that has been announced and will work with ministers and officials to reach a settlement that is coherent, practical and satisfactory on all sides”.