The government should consider switching the date on which the standard rate of VAT moves from 15 per cent to its former level of 17.5 per cent.

Businesses that believe they will make a trading loss in the current tax year can ask HM Revenue and Customs (HMRC) to take the anticipated loss into account as part of any rescheduling of their corporation tax or income tax payments.

The Chancellor has extended a scheme aimed at helping loss-making firms ease their cashflow worries by enabling them to reclaim taxes paid on profits during the last three years.

When Alistair Darling stands up in the House of Commons on 22 April, he will be delivering his Budget speech against the backdrop of one of the worst post-war recessions, if not the worst.

Last December’s reduction in VAT from 17.5 per cent to 15 per cent has had a measurable effect on consumer spending, a think tank has claimed.

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