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Entrepreneurs to get tax relief

LONDON (Bloomberg) - Chancellor of the Exchequer Alistair Darling will fine-tune changes to UK capital gains taxes tomorrow, targeting relief to entrepreneurs, the British Chambers of Commerce (BCC) said.

Mr. Darling probably will resist calls to revive "taper relief" for capital gains, a rule that reduced the tax bill on assets held more than two years to 10 percent from 40 percent, the business lobby group said in a statement.

The Treasury said in October it would eliminate that system in favor of a single 18 percent rate.

"There are likely to be targeted measures aimed at certain groups but we are not expecting the fundamental approach to change," David Frost, director general of the BCC, said in an e-mailed statement yesterday.

The measures are aimed at repairing the Labour government's relations with business leaders, who expressed anger that the tax burden on small business owners would rise because of the changes to capital gains taxes.

Treasury ministers met today with leaders from the nation's biggest lobby groups, including the Confederation of British Industry and the BCC.

Mr. Darling is due to appear in the House of Commons tomorrow, according to the Parliamentary timetable.

The BCC, which represents small businesses, said the Treasury may be struggling to make significant changes because it has already allocated the £900 million ($1.8 billion) it hoped to raise by 2010 by imposing the tax.

Mr. Darling estimates the changes would raise £350 million in the fiscal year through March 2009 and £750 million the year after.

Unions and Labour members had called for the change because managers of buyout firms were using the previous system to reduce their income tax payments.