Changes to capital gains tax (CGT) will have a negative impact on SMEs, one expert has claimed.

According to John de Groot, managing director of StartupCo, any increase in CGT would hit smaller firms.

He said: "It will have a negative impact, because it potentially reduces the return to the business owner for all the work and effort that he has put in in building the business."

Mr de Groot added that it is particularly "detrimental finically" to smaller firms, when the new arrangements are compare to the previous CGT regime.

However, he concluded by saying that whining about the situation will not do any good and firms should focus on growth regardless of the tax situation.

The government is to introduce an "entrepreneur's relief" scheme on April 6th, which will replace the current CGT taper relief system.

Under the scheme people will be charged a lower rate (ten per cent) on the first £1 million of business asset disposals.

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