Four business organisations have written a letter to Chancellor Alistair Darling raising concerns about the impact of ending Capital Gains Tax taper relief.

The Federation of Small Businesses, Institute of Directors, CBI and the British Chambers of Commerce claim that plans to increase the tax from 10% to 18% on April 5 will set back the growth of the economy by discouraging long-term investment.

The letter said: “Owners of small enterprises, who have toiled over the years to build up an asset, are now faced with selling up before April or risk a substantial dent to their investment.”

It is calling on the Government to suspend its decision and consult with key business organisations to resolve the situation.