The Chancellor Alistair Darling’s decision to double the value of capital gains that can be made under Entrepreneur’s Relief is potentially good news, for entrepreneur recruiters, according to the chairman and chief executive of Twenty Recruitment Group.

Paul Marsden welcomed the announcement in yesterday’s Budget that gains of under £2m would be subject to Capital Gains Tax (CGT) at the lower rate of 10%.

Marsden told Recruiter that while it was good news in the short term it depended on the government’s attitude to CGT more generally.

Marsden said there was a “general expectation” among taxation experts that the government wanted “to equalize the CGT tax regime” with the 50% income tax rate.

He said that if this was the case, then while entrepreneurs would pay only 10% on gains of up to £2m when they sold a business, they would end up paying a much higher rate on any gains above this figure.

Carol Dempsey, reward partner at PricewaterhouseCoopers, adds: “Companies and individuals will be pleased to see no increase in capital gains tax rates - this will give a boost to employee share plans and help support the economic recovery. Research shows that companies that encourage employee share ownership often perform better.”