COMMENT: You cannot please everyone all the time

12:58pm Tuesday 8th April 2008

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BEING Chancellor of the Exchequer is a little like being England football manager - both positions are variously called the poison chalice, or the impossible job.

Unless Fabio Capello wins back-to-back European and World Cups without conceding a goal, the press will inevitably find some way to criticise him.

The Chancellor is in the same boat. Many of the announcements made in his March Budget kicked in last weekend (the start of the new financial year) and, as the saying goes, you can't please all of the people all of the time.

One of the changes that caused most consternation among the business community was his rearrangement of capital gains tax (CGT) rules.

The Chancellor's move to make it a flat 18 per cent tax for all asset disposals, regardless of earnings, has infuriated entrepreneurs and business people who were previously able to pay 10 per cent, subject to correct planning.

Many people, including the Chancellor, will say it is a fair tax, less than the lower rate of income tax and a realistic amount to ask people to pay on the disposal of assets (much less than inheritance tax for instance).

Businesses are saying, quite rightly, that it effectively increases tax by 80 per cent and will curtail entrepreneurial activity, impacting on the health and vibrancy of the UK economy.

The flurry of private business sales and share offloads last week, including many in the North-west, was down to tax planners saving their clients from paying the new CGT rate.

It is a difficult situation to call - businesses are in business to make money and will clearly make a fuss when big changes like this come in.

I can feel sorry for people who have spent a lifetime building a business, suddenly having to give 18 per cent away, although a 10 per cent entrepreneurial relief rate for the first £1 million should take the sting out of the situation.

On the other hand, it is still only 18 per cent and shouldn't have too big an impact on business activity.

Time will tell, of course.