Ahead of next month's Autumn Statement, the ICAEW is calling for VAT on home improvements to be slashed to 5% to encourage refurbishment of empty homes and help ensure the economic recovery is felt across the country.

The proposal forms part of a package of recommendations which the ICAEW says are needed to restore public confidence in the tax system and the management of public finances. These include the appointment of a government wide Chief Financial Officer to help deliver anticipated spending cuts of 3.5% from 2015

The ICAEW also wants the government to guarantee loans provided by banks for businesses that have been trading for two to five years and extend rate relief until at least 2015. The institute says there should be a cap on the total administrative costs of tax changes to small business and HMRC should extend the exemption for SMEs from the new Real Time Information (RTI) 'on or before' requirements.

Michael Izza, ICAEW chief executive, said: 'Going forward, three things matter: the recovery has to be sustainable over the long-term; its effects need to be felt across the whole of the country; and the choices made now must enable the UK to compete effectively in a global economy in the years ahead.'