The plan to extend employee share ownership has been tweaked, increasing the tax breaks for employees taking up the option in a bid to persuade companies to take up the government's so-called John Lewis ownership model, which has met lukewarm response from business so far.

To drive interest in the scheme, in AS2013, the government will provide additional funding of £25m to support employee ownership, taking the total package for this sector to £75m annually.

This will be used to fund a relief from capital gains tax on disposals of shares that result in a controlling interest in a company being held by a trust used as an indirect employee ownership structure.

There will also be an annual income tax exemption on bonuses or equivalent payments up to an amount of £3,600 paid to employees of companies that are indirectly employee owned.

At the same time, under the separate Share Incentive Plans, participants will be entitled to £3,600 a year of 'free' shares and to £1,800 a year for 'partnership' shares. The Save As You Earn savings contribution limit will be doubled from £250 to £500. This will be the first increase for these schemes in over a decade.