Calls for corporation tax rate to be cut from 28% to 25% to help boost the UK's tax competitiveness is just one fiscal stimulus the chancellor could employ to boost the economy, according to BDO Stoy Hayward. In a report that highlights what the accountancy firm believe the chancellor should concentrate on in coming budget, it suggests that reducing corporation tax is highly recommended as it could be achieved without significant cost to the exchequer, if certain other reliefs such as capital allowances, were reduced. The report also highly recommends that future VAT rates could be hiked up beyond the previous rate of 17.5% as it collects around £80bn currently. Compared to other European countries, UK VAT is at the lower end of the scale. In addition BDO suggested a temporary measure of reducing employer's rate of national insurance from 12.8% to 8% until the next financial year. However, this move could cost £20bn but would boost the profitability of major employers and could help decrease the number of redundancies. The accountancy firm also touches on inheritance tax or capital gains tax, calling for confirmation by the chancellor that he will make no amendments to either before the general election. His reforms to both areas will see the transfer of inheritance tax relief between married couples and the introduction of a flat 18% rate of capital gains tax. Stephen Herring, senior tax partner at BDO Stoy Hayward said: 'There are a number of areas such as VAT, corporation tax and pension relief for high rate tax payers, where the chancellor may be driven to implement significant changes... Now is the time for the government to put economic priorities over political expendency'.