This is going to have the complete opposite reaction to what the government wanted. The main reason why people start up their own businesses is to aim to make as much money as possible, either by making good yearly profits, or by building up the businesses to a point where when they sell it, they make enough money to live a comfortable life. However this is now not going to happen.
Here’s the scenario. A person wants to sell their business and the profit they will make from the sale will be £2 million. Under current CGT rules, they will be taxed £360,000. Under the new rules, that will go up to a staggering £1 million. I foresee a lot less business sales now in the future. How does the government think they are going to drive the recovery forward using small businesses when they want to cripple the amount of profits those sales make. People are in business to make money, not to be taxed through the nose.