Chancellor Alistair Darlings first pre-budget report is "adding to the tax burden of small businesses" says John Walker of the federation of Small Businesses. The budget report which, included changing the Capital Gains Tax rate to a flat rate of 18 per cent, will come to effect in April 2008.
John Walker, the FSB's policy chairman, said: "This comes as a big disappointment to small businesses still reeling from increases in corporation tax announced in the last Budget."
Confederation of British Industry deputy director general John Cridland said: "The CBI was hoping for a statement for enterprise with encouragement for small businesses, which were hit by tax increases in the last Budget.
"There was no such statement and many small businesses will be hit again by the increase in the Capital Gains Tax rate, which will adversely affect the balance between risk and reward.
"This move is disappointing and may lead to a reduction in investment in start-up and growing businesses.