In respect to the appearance of Business Voice, the CBI magazine that we publish, I have held back from posting this. But I did have the opportunity to have a chat and coffee with Philip Yea, CEO of 3i.
There was really nowhere else the conversation could start. What does he think of the proposed changes to CGT?
For private equity firms, he said that the change is “a move the wrong way for an industry that is important to the vitality of the UK. We are already moving down the international league of tax competitiveness and this takes us further down.
“The European private equity industry is headquartered in London; if you change too much, it affects London as a centre.”
“Entrepreneurs,” he then said, “like consistency. They plan around consistency. This was a major plank of the government’s policy for the past five or ten years. It has been incredibly successful. Why change it?
“It has been argued that this is a simplification – but nobody was putting their hand up for this. There are plenty of areas where business people are dying for simplification but this wasn’t one of them! Out of the blue, a regime has been changed. I think it’s a shame.”
As the CEO of a quoted company, 3i shareholder-employees are also affected. But Yea makes no special pleading here. It may be a FTSE-100 enterprise but, with approximately 750 employees, it’s quite a small company with a growing number of non-UK employees and many senior staff being incentivised primarily through private equity’s carried interest schemes.
However, a number of 3i employees will be hit – and the CEO is one of them. “It’s a dis-improvement. I was better off before!”
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