Ernst & Young's Chris Sanger, who came up with the original scheme, has been asked to put forward other ideas by the Federation of Small Businesses (FSB).

The FSB, along with other business organisations, has argued against scrapping the taper relief. It says Britain's entrepreneurial culture will be damaged if the Chancellor goes ahead with his plan.

Instead, the FSB has come up with its own Entrepreneurs’ Relief proposal, which includes plans to:

• Provide a 50% relief on capital gains up to a limit of £750,000, which equates to an effective tax rate of 9%.
• Make it easy to identify who would qualify for the relief.
• Encourage serial entrepreneurship and prevent entrepreneurs from leaving the UK, which could in turn increase the overall tax take from them.
• Simplify the capital gains tax system in line with the Chancellor’s intentions.