ABI criticises CGT changes

Business group the Association of British Insurers (ABI) has expressed concerns over the government's handling of its capital gains tax (CGT) policy.

According to the Times newspaper, the ABI has written a letter to the Treasury in the wake of the upcoming Budget announcement, which is due to take place next week.

Stephen Hadrill, the director-general of the ABI, said in the letter that changes to CGT was one issue which had "damaged the Treasury's credibility".

Many businesses have criticised proposals by Alistair Darling to introduce a flat rate of 18% on CGT – particularly because of the lack of consultation on the issue.

The Times quotes the letter as stating: "We have seen serious problems in the last few months."

"Concerns about the handling of Northern Rock, reaction to the credit crunch and the fallout from various measures contained in last October's Pre-Budget Report have all put the position of the financial services sector and London's pre-eminence as a financial centre at risk."

"So the Budget provides a timely opportunity for you to repair the government's own reputation."