Small and medium-sized enterprises (SMEs) are set to see a “tenfold” increase in tax breaks starting next year, as the tax relief spend on Annual Investment Allowance for plants and machinery is expected to jump from £25,000 up to £250,000.

The news comes as further improvements for SMEs are being rolled out – earlier this month it was announced that investors in ISA saving schemes will be able to invest in small company stocks, while the Small Business Rates relief scheme has been extended until 2014.

The Federation of Small Businesses stated that the UK was well on its way to delivering smart solutions to drive business growth across the country, allowing business owners more flexibility to hire staff, improve marketing campaigns and produce more goods. National chairman of the federation, John Walker, commented: “The capital allowances increase is recognition of the important role small firms will play in the recovery”.