# CVC Joins Chorus of Private Equity Warnings Over UK Carried Interest Tax Plan ## What's the news? CVC Capital Partners has become the latest private equity firm to criticize the UK government's plan to increase taxes on carried interest, a form of compensation for investment managers. ## Why is this important? The proposed tax hike has sparked a backlash from the private equity industry, which argues that it will damage the UK's competitiveness as a financial center. ## What are the key concerns? * The industry says that the tax hike will make it more expensive for UK-based private equity firms to attract and retain talent. * It also argues that the tax will reduce the amount of investment available to UK businesses. * The British Private Equity & Venture Capital Association (BVCA) has warned that the tax hike could lead to a "significant decline" in the UK's private equity industry. ## What's the government's position? The government has said that the tax hike is necessary to raise revenue and to ensure that the private equity industry pays its fair share of taxes. ## What's the next step? The government is due to publish a consultation on the proposed tax hike in the coming weeks. The private equity industry is likely to continue to lobby against the tax hike in the run-up to the consultation. ## Additional information * The proposed tax hike would increase the tax rate on carried interest from 20% to 45%. * The tax hike would apply to carried interest earned by UK-based private equity firms from investments made after April 6, 2023. * The government has estimated that the tax hike will raise £14 billion over the next five years. ## Sources * [CVC joins chorus of private equity warnings over UK carried interest tax plan](https://www.ft.com/content/3242cf68-2a71-4469-ba63-7651c1d5da49) * [UK government's plan to hike carried interest tax sparks private equity backlash](https://www.reuters.com/business/finance/uk-governments-plan-hike-carried-interest-tax-sparks-private-equity-2023-02-08/) * [BVCA warns of 'significant decline' in UK private equity industry if carried interest tax hike goes ahead](https://www.bvca.co.uk/news/bvca-warns-of-significant-decline-in-uk-private-equity-industry-if-carried-interest-tax-hike-goes-ahead/)
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