The British Inland Revenue has been told to trim a package of tax breaks for Northern Ireland after discussions with the European Commission found that some elements were incompatible with the single market.

The Chancellor, Mr Gordon Brown, last year announced 100 per cent first-year capital allowances for spending by small and medium-sized businesses on plant and machinery.

As a result, parts of the road haulage business, and some projects in the agriculture and fisheries sector will now be added to those businesses already excluded.