There will be little cheer for businesses when Gordon Brown delivers his pre-Budget report this week, according to tax experts.

Matt Coward, tax director at the Brighton office of chartered accountants BDO Stoy Hayward, said:

"We already know there'll be tax rises from next April in the form of National Insurance increases but the Chancellor now faces new challenges of lower than expected tax receipts, lower than forecast economic growth, higher than forecast government borrowing and large increases in public expenditure."

Mr Coward said there were three key measures which would give a boost to Sussex business:

Simplification. Employers
had to shoulder a heavy burden of red tape as they administered increasinglycomplex payrolls.

Any measure that could simplify reporting responsibilities would be most welcome.

Innovation. Sussex
boasted some of the most talented and innovative businesses in the UK and some had already benefited from research and development tax credits.

The scope of the relief should be widened from its present, relatively complex definition, so all businesses carrying out research and development could benefit.

Rate of tax. The Chancellor
should introduce a one per cent cut in the main rate of corporation tax, currently at 30 per cent, to ensure the UK tax regime for companies and inward investors remained competitive.

Mr Coward said: "I wouldn't expect any major announcements on tax this time but, significantly, the Chancellor will not rule out the prospect of further tax increases next April.

"I would expect some minor tinkering with a number of tax incentives, but if there's anyone expecting an early Christmas present for Sussex business, they'll be disappointed.

"The Chancellor simply doesn't have the money."