BUSINESS fears over a proposed hike in capital gains tax have not been eased by the Chancellor’s last-minute changes.

Alistair Darling had provoked anger by announcing that the CGT tax rate would go up from 10 per cent to a single rate of 18 per cent, a rise of 80 per cent.

The move was aimed at private equity investors but would have penalised entrepreneurs who worked hard to create a business. Those who planned to sell up were outraged.

Business pressure forced Mr Darling into a corner and yesterday, (24) he announced that there would be a headline rate of 18 per cent but was abandoning the proposed single rate. Taper relief which can result in a 10 per cent rate is to be scrapped, along with indexation relief. Crucially, Mr Darling unveiled a new Entrepreneurs’ relief.

But the CBI hit out at the new proposals, claiming it was a £700 million raid on investors and savers.

Richard Lambert, director-general of the CBI, the business organisation with members across the county and a regional office in Sevenoaks, denounced the delay and criticised the plans. They would "seriously clobber" successful business people selling assets.

He said: "This is superficially quite clever and on the surface might seem like a relief after three months of uncertainty, but even the smallest business owner will lose taper relief and indexation and be worse off than before October.

"This tax hike has been badly handled from start to finish. It was rushed out without consultation and there has been precious little since, despite the interminable wait for these revised plans. To be given 10 weeks to make major business decisions is simply not reasonable."

Brian Jackson, head of tax at KPMG in Kent, was more positive. He said: "The uncertainty surrounding the CGT proposals has been bad news but we are now hopeful that the resulting tax policy will be somewhat closer to what was intended all along."

But he hit out at the Chancellor for not speaking to business before his announcement. And announcement had killed all hope of a simplified CGT system. "The new relief will add complexity. And this complexity will add to the red tape and costs for business."