The report, by research consultancy firm Freshminds, revealed that 71 per cent of SMEs think the prime minister and chancellor have had a negative effect on UK enterprise.

Over half of those questioned voiced concerns about the impact of changes to the capital gains tax (CGT).

Freshminds chief executive Caroline Plumb says: ‘Today’s findings reflect a worrying trend within the [small business] community and indicate that significant changes are required if Brown and his government are to regain the confidence of the UK’s entrepreneurs.’

The research also found that 35 per cent of SMEs would prefer to be an employee rather than an employer in the current business environment.

The chancellor Alistair Darling announced changes to the CGT in his pre-budget report. The current system of taper relief is to be abolished in favour of a new flat rate of 18 per cent.

The changes are due to begin in April 2008.