Measures announced by chancellor Alistair Darling in the pre-Budget report will now affect entrepreneurs who were relying on selling their business to fund their retirement, often in place of a pension.

The changes – which have been fiercely opposed by business groups including the British Chambers of Commerce and CBI – will see the various rates for capital gains tax scrapped in favour of a flat rate.

This means small business owners selling up will have to pay 18% rather than the previous rate of 10%, which was introduced by Labour government in the 1990s in a bid to encourage start-ups.

“Many entrepreneurs now face a more uncertain retirement,” explained FSB national chairman John Wright.