It was widely expected that Mr Sunak would scrap the relief altogether.

But in his Budget Mr Sunak said while the relief was unfair in many ways, he had decided to retain it to reward smaller entrepreneurs who formed the bulk of users.

However, by retaining it some experts believe he could boost pension savings as an alternative form of saving for those business owners now less likely to see their company as their pension.

Entrepreneur's relief is given on Capital Gains Tax when a business owner sells or liquidates their company. It costs the Treasury over £2bn a year.

It is designed to reward entrepreneur's for launching and building companies.

Caroline La Jeune, a partner at Blick Rothenberg said: “Successful entrepreneurs fears (have been) realised with the reduction of Entrepreneur’s Relief to a lifetime limit of only £1m. This runs counter to the Chancellor’s headline commitment to encouraging private businesses.”

Fellow partner Mark Levitt: “With the cut to Entrepreneurs’ Relief in the Budget, business owners should consider paying more into their pensions given the relaxation of reliefs for those earning £200,000. Capital Gains is still lower than Income Tax and vendors will need to ensure that they have fully utilised their Entrepreneurs’ Relief (where appropriate) with family shareholders.”

Steven Cameron, pensions director at Aegon, said: “For some planning to use the sale of their business to fund their retirement, the dramatic reduction in entrepreneurs relief will come as a harsh blow.”