THE Government says it will slash the tax burden on businesses by £150 million a year.

Chancellor Gordon Brown is introducing a series of measures, first disclosed in the Pre-Budget Report in November, which is aimed at promoting enterprise and investment.

One of the main changes will be a tax exemption for gains and losses on substantial shareholdings, which the Treasury believes will reduce the tax burden by £150 million per year.

The move is designed to allow businesses to restructure quickly and ensure that key decisions are made for commercial, rather than tax, reasons.

Other measures coming into effect on April 1 include a tax credit to boost research and development among larger companies, and relief on the costs of intellectual property, goodwill and other intangible assets.

The Chancellor believes this will be worth around £200m to UK business, rising to a maximum of £350m in the long term.

Mr Brown said: "In our first term, we put stability and employment creation first. In our second term,we are able to build on this platform of stability and employment creation.

"Our energies must continue to be directed to promoting enterprise and investment and raising our country's productivity."

The Chancellor will unveil this year's Budget on April 17.

The British Chambers of Commerce welcomed the move. David Lennan, director general of the BCC, said: "The tax measures will aid big business competitiveness by bringing our tax law in line with, and even going beyond, what is already available in other countries.

"In its desire to improve productivity and create a high value-added economy in the UK, the Government is right to use tax policy to encourage innovation and to smooth the transfer of intellectual property."

The Transport and General Workers' union also applauded the Chancellor's actions. General secretary Bill Morris said: "The measures represent a very welcome first step towards a sustainable response to the needs of manufacturers."