There will be widespread panic selling in the hospitality sector if the Government does not re-think plans to raise capital gains tax from 10% to 18%, the British Hospitality Association (BHA) has warned.
Earlier this month, Chancellor Alastair Darling announced a flat capital gains tax rate of 18% to replace the existing tapered system, which allowed business owners to pay 10% tax when selling up. The change will be introduced with the new financial year in April.
Martin Couchman, deputy chief executive of the BHA, said that the increase would be an "absolute body blow" to the hospitality industry.
"It has caused more concern among independent operators than any other issue for many years," he told the Daily Telegraph, which is campaigning against the change.
Nigel Waller, vice-chairman of the Penzance and District Tourism Association, added: "You could have a stampede of people trying to dispose of the businesses before April and it could become a buyers market."
By Christopher Walton
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