The government must take action to support Britain’s medium-sized businesses in its Budget on 18 March, according to the CBI.

The UK’s “Mittlestand” – the name adopted from Germany’s thriving medium-sized business sector – needs more opportunities for investment as well as help moving into international markets, it said.

The CBI also called on the government to maintain its course with current plans to reduce the national budget deficit.

CBI director general John Cridland said the economic recovery is now “well rooted” and that the Budget should “lock in” this success.

“This is a good opportunity for the chancellor before the election to support growth and investment well beyond the election, providing stability, certainty and simplicity for the UK’s ‘Mittelstand’ to get themselves on the front foot.

“So the chancellor must reward growing, ambitious firms with the tools to get on with the job of rebalancing the economy and lift productivity. There has been good progress on this front from the government, and the chancellor can now take further action to boost investment and innovation.

“If recent tax receipts have provided a bit more breathing space in public finances, the chancellor may also want to make progress on bolder reforms, including steps to boost the provision of universal childcare.”

Specifically, the CBI is calling for:

- A boost in the availability of long-term capital growth

- Reverse supplementary charge on North Sea oil producers

- Make permanent the annual investment allowance to boost investment in plant and machinery

- Boost research and development tax credits to cover manufacture of innovations

- Reduce complexity in the tax system

- A fiscally neutral Budget – measures should be paid for by efficiency savings and public service reform

- Extension of free childcare to all children aged one and two

- Measures to address the skills shortage with business-relevant degrees

Cridland added: “Businesses must and do pay their fair share of tax, but for growing firms a complex, outdated system stifles their ability to invest.

“Some current rules jeopardise the cashflows of ambitious firms, so we want to see 37,000 more small and mid-sized businesses paying their Corporation Tax on an annual basis only, not wasting valuable time and money making payments every three months.”