The chancellor's revision to capital gains tax (CGT) is "good news" for SMEs but trust in the government may have already been damaged, one industry body says.

George Derbyshire, chief executive of the National Federation of Enterprise Agencies (NFEA), said: "Consultation at the outset might have avoided this situation, and there is a danger that the small business community might feel its trust in the Government has been eroded."

Mr Derbyshire added the fact that people who profited through stock market speculation or the buy-to-let market had CGT halved while people who built up their own businesses saw their tax rates increase substantially gave "the wrong message".

The government initially planed to impose an 18 per cent standard rate of CGT but subsequently announced an "entrepreneur's relief".

Under the relief anyone selling their business will pay CGT at ten per cent for the first £1 million they received.

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