The chancellor is weighing plans to hand hundreds of millions of pounds in tax incentives to small businesses in next month's budget as she seeks ways to pitch the government as pro-enterprise to Britain's private sector.

Sky News has learnt that officials have drawn up proposals to lift the cap on a scheme called Enterprise Management Incentives (EMIs), which allows smaller companies to offer share options to employees with no income tax or national insurance liabilities.

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The EMI share options cap currently sits at £250,000 over a three-year period, and is applicable to businesses with assets of £30m or less, as well as fewer than 250 employees.

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