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Opponents to forthcoming changes in capital gains tax continue to come forward, with ifs ProShare becoming the latest critic of the Chancellor's planned reforms.
The not-for-profit organisation met Treasury officials to express the views of the employee share plans industry, which it represents, and to provide evidence of the negative impact that CGT changes could have on many workers.
Around 1.7 million employees in the UK make monthly savings through a save-as-you-earn (SAYE) scheme — and ifs ProShare believes that about 16% are likely to be worse off as a result of Alistair Darling's announcement in October's Pre-Budget Report.
The changes mean that employee shareholders may now be subject to an 18% CGT charge from April 2008, regardless of how long they have held shares in their employer.
Ifs ProShare claims that members of staff who have contributed to the success of their employers are now going to be worse off than under existing legislation, while non-employee shareholders are to have their CGT liabilities substantially reduced (from 40% to 18%).
Head of employee share ownership at ifs ProShare, Fiona Downes, said that '80,000 employees a year could now face an increased tax bill. If the Government wishes to continue encouraging medium- and long-term saving through employee share ownership, then action is needed to address this issue'.
Ms Downes's organisation put forward a range of possible solutions for the Treasury to consider, including a complete exemption from CGT for shares acquired through SAYE schemes.
