More than a third of entrepreneurs have shelved plans for investing in their business after the governments controversial capital gains tax (CGT) reforms, according to new research.
In a poll of 500 SMEs, by the Confederation of Industry (CBI), two fifths of company directors said they has changed arrangements for new business investments because of the abolition of taper relief.
Some 36 per cent of company directors said they had dropped plans for putting extra cash into existing operations while 42 per cent of equity holders believed they would become less entrepreneurial.
More than two thirds of company directors said the reforms undermine the governments approach to enterprise while 72 per cent doubted ministers commitment to enterprise and new business start-ups altogether.
Some 63 per cent of firms surveyed said they did not believe the changes meant that red tape would be cut.
The vast majority of respondents - 93 per cent - said they believe the government needs to do more to restore it commitment to entrepreneurial culture and new UK company formation.
John Cridland, CBI deputy director-general, said: "Im afraid that as of today small businesses believe the governments enterprise strategy is shot to pieces.
"[It] is going to have to start again and it has a lot to do to convince the small business community that it understands their contribution to the seedbed of the economy."
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