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Dragons join CGT backlash

Theo Paphitis, Deborah Meaden and James Caan have publicly come out in opposition to taxing the gain on all assets at 18%, a move which could add 8% to entrepreneurs' tax bills when they sell their business.

According to the Daily Telegraph, Paphitis said it was "appalling decision" which penalises investors willing to back risky but fast-growing companies.

"Why should I invest in a business that has lots of risk and could take years to develop when I can speculate short term where there's less risk?," he told the newspaper. "That's the real danger [in the change]. It discourages people from investing in long-term projects."

Meaden added: "The great thing about entrepreneurs is that they don't look at the downside. People will still start up. The disappointing thing will be when they come to exit. Will they feel so pleased when they give more to the taxman?".

Private equity boss James Caan, who replaced previous Australian entrepreneur Richard Farley for the fifth series of the programme, called on Alistair Darling to reverse his decision. "The chancellor had a great opportunity to make his mark but to put a dampener on small businesses was not a good move," he said.

The Dragons' comments are the latest in several attacking the announcement in last week's pre-budget report. More than 10,500 people have signed a petition on the Downing Street website while two entrepreneurs have set up a protest group on social networking site Facebook.

In addition, four business groups including the Federation of Small Businesses yesterday sent a joint letter to Darling calling for an urgent meeting.

Image © BBC