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Buyout firms threaten exodus over tax changes

14 September 2007
Categories: News
The British Private Equity and Venture Capital Association has warned that its members may relocate to other EU countries if the Government clamps down on tax benefits.

The leading trade body for private equity in the UK has warned that its members may relocate to other EU countries if the Government clamps down on tax benefits.

The British Private Equity and Venture Capital Association (BVCA) says that if plans to tighten current perks are cited in the Treasury's pre-Budget report next month, the multibillion-pound buyout industry might decide it would benefit from a move overseas — a decision that could have “dire consequences” to the UK economy and mean thousands of job losses.

The BVCA claims that the tax regime of Britain holds only a “fragile” advantage when compared to other European nations, with France, Italy and Germany all likely alternatives should this country's relief for the private equity sector be scrapped.

However, some private equity groups have voiced their dissent, saying they would not take part in an exodus of companies who already abuse UK tax perks.  

Earlier this week, CBI director-general Richard Lambert called for more transparency in the tax dealings of private equity, saying greater accountability to staff and stakeholders is the best way forward. But he also warned that a rushed solution to the controversial issue would not be practical.

Categories: News
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