There are suggestions the Chancellor will reduce the revenue threshold at which firms pay VAT, from £85,000 to £43,000, exposing more small businesses to the tax.

Surren Thiru, head of economics and business finance at the British Chambers of Commerce, told Wake up to Money this would be a big "misstep" at a time when firms are struggling with other overheads like business rates.

It's not just about the cost, he adds. "What we hear from businesses is that some of the administrative burdens of becoming VAT registered is a real concern."

The danger of reducing the VAT threshold is that firms will have less incentive to grow, he adds.