Paul Myners, the former chairman of Marks & Spencer , has issued a stinging criticism of the tax rules that apply to private equity companies.
Myners, now the chairman of the Low Pay Commission, said he could not understand how private equity executives could earn huge payouts and only be taxed at 10%, the FT reports.
'It is reasonable to ask (whether this is) fair reward for the contribution that private equity makes and the value it delivers, and whether the favoured tax treatment is justified,' Myners was quoted as saying.
Peter Linthwaite, chief executive of the British Venture Capital Association , however, said private equity 'pays and plays by the same rules as everyone else'.
'Carried interest is deemed to be an investment in unlisted securities. The same rules apply to anyone investing in unlisted securities,' said Linthwaite.
Further reading:
ICAEW head of corporate finance defends private equity
