MEZIESBLOG

Businesses are more concerned about tax than at any other time since 2017, a survey has found. 

The quarterly survey by the British Chamber of Commerce, a corporate lobby group, found 63% of business cited tax as a worry in the final quarter of last year – up from 48% in the previous three months. 

The levels in certain sectors are higher, with 72% of production and manufacturing firms and 68% of construction and engineering businesses raising tax as a concern.  

It’s the latest sign that companies are grappling with the changes made in the highest tax-raising budget since 1993. 

Rachel Reeves, the chancellor, increased employers’ national insurance to 15% and also reduced the threshold at which they have to start paying it.

Here, a business and economics expert Paul Kelso explains how the budget will affect businesses… 

Shevaun Haviland, director general of the British Chamber of Commerce, said: “The worrying reverberations of the budget are clear to see in our survey data.

“Businesses confidence has slumped in a pressure cooker of rising costs and taxes.” 

She also warned businesses would be forced to increase their prices in the coming months and the “economic landscape will get worse” without government help. 

“Firms of all shapes and sizes are telling us the national insurance hike is particularly damaging,” she said. 

“Businesses are already cutting back on investment and say they will have to put up prices in the coming months. 

“Without urgent government action to ease the pain on businesses, the challenging economic landscape will get worse before it gets better.” 

There has also been a significant drop in business confidence, with only 49% of firms saying they expect their turnover to increase in the next 12 months – down from 56% in the previous quarter.

This is the lowest figure since the aftermath of Liz Truss’s disastrous mini budget in late 2022. 

Investment plans seem to have been affected as well, with nearly a quarter of business saying they have made cutbacks.