Two employers’ organisations have called for the scrapping of national insurance.

The Institute of Directors and the British Chambers of Commerce, in separate papers, say NI is increasingly being used to finance current spending and is therefore merely another tax.

George Cox, director general of the IoD, said: "What we currently have is an extension of the taxation system masquerading under a different guise, which adds enormously to the complication of the overall system."

Meanwhile, the FT reports that a tax change that allows companies with taxable profits of of less than £10,000 to pay a zero rate of corporation tax is set to be withdrawn in the forthcoming Budget.

The move could save the government £1 billion a year, but was introduced only two years ago.