Budget: Tax rise 'may put off entrepreneurs'

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Mr Straight, who formed Leeds-based recycling products firm Straight in 1993, said the CGT increase from 18 per cent to 28 per cent from midnight may deter entrepreneurs. He said the value of incentives such as share plans for directors is diminished as a result.

"It was a fair Budget," he said. "But the capital gains tax is not too clever. It becomes more difficult to incentivise my staff.

"It really is quite destructive in terms of employment incentives and entrepreneurism in general. For the people that have helped build up the business, it doesn't help them."

Mr Straight's comments came despite a pledge by Mr Osborne to increase CGT relief for entrepreneurs.

Previously levied at 10 per cent for the first 2m of entrepreneurs' gain, it is to be extended to the first 5m of gains.