The main capital allowance rate for businesses is set to be doubled to 40% to encourage firms to bring forward investment.

While Alistair Darling emphasised that "getting credit flowing again is the essential precondition to economic recovery," his plans to double capital allowances for businesses – although welcomed – could do little to help small firms.

It also gives enhanced tax relief to support investment of £50 billion, including £10bn of investment in the communications sector. But according to AccountingWEB.com’s Simon Sweetman, this is unlikely to affect the smallest 95% of businesses who are already covered by the Annual Investment Allowance for expenditure up to £50,000 a year.

“While welcoming changes to capital allowances and loss relief, the reality is that these will have only provide limited benefit to smaller businesses,” added Phil Orford, chief executive of The Forum of Private Business (FPB). “In addition, restrictions to the new credit insurance scheme and the failure to address business taxes remain considerable barriers to business survival and growth.”