Entrepreneurs aren’t looking to sell their businesses early to avoid higher taxation as a result of changes to capital gains tax (CGT), according to a new report.

Entrepreneurs aren’t looking to sell their businesses early to avoid higher taxation as a result of changes to capital gains tax (CGT), according to a new report.

After proposing to axe tapered tax relief and introduce a flat 18 per cent rate, chancellor Alistair Darling announced a 10 per cent rate on the first £1 million of lifetime capital gains last month. Up to 80,000 small business owners are expected to be some £200 million better off a year as a result of the move, which was made in response to the backlash from business lobby groups that feared businesses would sell early to avoid the change.

However, the NatWest and RBS small business monitor found that only 7 per cent of business owners were planning to sell their businesses before the introduction of the higher rate on 6 April.

Steve Pateman, chief executive of NatWest and RBS Business Banking, said: “There was no knee-jerk reaction to sell businesses to avoid proposed tax increases, instead entrepreneurs have rightly prioritised the issues within their control.”

He added that staying ahead of the competition remains the chief concern for businesses, ahead of “government legislation and red tape.”