The accountancy profession has jumped to the defence of private banks including Kleinwort Benson after it miscalculated capital gains tax for many of its customers using out-of-date rules. Chancellor Gordon Brown was criticised by accountants following the 1997 Budget for making complex changes to CGT while organisations were trying to adapt their systems for Y2K and the euro. John Whiting, tax partner at PricewaterhouseCoopers, said: 'It's exactly what we said would happen. It is the fault of the system. I feel sorry for Kleinwort Benson.' But Kleinwort Benson chief executive David Henderson denied that CGT changes were the main reason for the miscalculation. 'The key issue was the timing of the changes to CGT rules with the Y2K changes going through,' he said. The bank promised none of its customers would face problems with the Inland Revenue as a result of the errors. Thousands more customers of stockbrokers and other private banks face repetition of the problems, which stem from a software supplier delaying implementation of tax law changes while rewriting software designed to deal with the millennium bug. The Revenue is understood to be having trouble calculating self-assessment returns because CGT is getting so complicated. 'We have been saying from the outset that it is getting too complex. The only answer is simplification,' Whiting added.
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