KENT bosses have accused the Government of betraying entrepreneurs with its proposed hike in capital gains tax.

Chancellor of the Exchequer Alistair Darling has come under sustained fire from representatives of business organisations angry at his announcement in the pre-budget report that he was scrapping CGT taper relief.

This currently allows entrepreneurs to pay just 10 per cent on the profits they make on investments held for longer than two years.

But Mr Darling has decided to impose a flat rate of 18 per cent - a swingeing increase of 80 per cent.

The measure is designed to catch private equity investors but it would have the wider effect of penalising hard-working entrepreneurs who risked all to set up their venture.

Frazer Thompson, chairman of Kent Institute of Directors, hit out at the Chancellor’s controversial proposal, saying that the business community should have been fully consulted on such a major change.

Mr Thompson, who is also managing director of Chapel Down Winery in Tenterden, said: "The proposals betray the Government’s stated commitment to Britain’s entrepreneurs. The change to a flat rate of 18 per cent reduces the incentives available to entrepreneurs relative to the holders of non-business class assets.

"An 80 per cent increase is far too severe and the abolition of taper relief on all asset classes encourages short termism when most growing businesses need longer term investors. The abolition of indexation essentially means the Chancellor will be taxing the effects of inflation rather than genuine capital gain."

Following the outcry, Prime Minister Gordon Brown has indicated that there may be some concessions to entrepreneurs selling up ahead of retirement.