Chancellor Gordon Brown has trimmed regulation and red tape for recruiters in this year’s Budget.

The government plans to cut the number of agencies overseeing companies and to simplify the tax payment system.

The Inland Revenue and Customs service will now consult on a single tax account for small businesses, and will provide a single point of contact for value added tax (VAT) and corporation tax.

The government will also look at expanding its simplified tax system. Nearly 70,000 small firms currently make a single VAT payment rather than paying per transaction.

Brown said the government would work with the Chambers of Commerce to ensure as many of the 600,000 firms that are eligible to use the system do so quickly.

Mike Kaye, chief executive of public sector recruiter Tradewind Recruitment, welcomed the cut in red tape. “The administrative burden has certainly increased over the last few years,” he said. “These measures are very good for the industry, but overdue.”

But Gareth Osborne, managing director of the Recruitment and Employment Confederation (REC), believes the government has missed an opportunity to entice older people back to work.

He said: “Those with occupational pensions are penalised if they choose to work. As the government needs to retain workers for longer in the labour market, this policy needs to be urgently reviewed.”

The Budget also revealed plans to provide part-time employees with tax benefits and assistance with re-training costs when they lose their job. The Chancellor has also improved incapacity benefit rules for disabled people seeking work.