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Chancellor Alistair Darling is expected to make a concession for entrepreneurs on his capital gains tax (CGT) reforms, by introducing a lower rate.
The CGT reforms, which were announced in Octobers pre-budget report after the Conservatives revealed their surprise trump card - a higher inheritance tax threshold - triggered a backlash among business groups.
The taper relief, which reduced CGT on a sliding scale from 40 per cent to ten per cent was to be replaced with a flat rate of 18 per cent starting from this April.
Companies directors of small businesses groups and entrepreneurs argued that it was unfair for them to pay the same rate as much larger companies with bigger resources.
The reforms were intended to clamp down on low tax paid by private equity firms, but critics pointed out that it would have the incidental effect of penalising entrepreneurs of every kind.
The Federation of Small Businesses has campaigned for a special rate of nine per cent on the £750,000 worth of gain over a lifetime and in an announcement to the Commons, the chancellor is expected to introduce a rate close to this for entrepreneurs.
Miles Templeman, director general of the Institute of Directors said that if the overall effect of the reforms is still a significant tax hit for businesses, they "will not be pleased".
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