The upcoming Budget is prompting some business owners to reconsider their future in Britain, according to new research.
Businesses have warned the Chancellor that it is becoming increasingly difficult to operate following tax rises in the last Budget, alongside higher energy prices and stubborn inflation.
A survey of 500 business owners with turnovers of £5million found that 42 per cent have concerns about the impact of the Budget on their business, with the same number saying they would consider leaving the UK if a wealth tax is introduced.
There has been rampant speculation that the Chancellor could introduce more taxes on the rich to meet the growing fiscal black hole.
She has said that taxes on the wealthy will be ‘part of the story’ in the Autumn Budget.
The research by Smith & Williamson also found two in five business owners would consider relocating if capital gains tax rates are increased and inheritance tax reliefs on gifting assets are restricted.
Toby Tallon, tax partner at S&W said: ‘Our research sends a clear message to the Chancellor: further tax rises on risk-takers and wealth creators could drive more of the UK’s most successful businesses and their owners out of the country. Business owners are not just concerned, they’re ready to act.
‘The Chancellor must put business owners at the heart of the next Budget. We need bold policies that give entrepreneurs confidence and keep Britain open for business while staying fiscally responsible.’
Some 37 per cent of business owners say that if they face another tax raid, they are somewhat or very likely to make redundancies in the next 12 months, while 39 per cent say they anticipate a hiring freeze.
Unfortunately, tax hikes are more likely as Rachel Reeves gave the clearest indication yet that she will target ordinary people in her Budget.
In a pre-Budget speech on Tuesday, she said she would do ‘what is right’ rather than what is popular and failed to rule out tax rises.
It comes as the Resolution Foundation warned Reeves that she’d have to increase taxes by £26 billion and break her income tax pledge.
Markets reacted nervously to Reeves’ speech, with the pound falling to a seven-year low and both the FTSE 100 and FTSE 250 tumbled.
It suggests that businesses are anticipating another tax raid, to follow last year’s increase in employer National Insurance contributions (NICs).
Senior business leaders have told the Chancellor that her tax rises have pushed costs uncomfortably high, which is filtering through to the prices paid by customers.
Tim Richards, founder and chief executive of cinema chain Vue, said businesses had been ‘squeezed’ and ‘attacked’ and that ministers are ‘hurting the people they’re trying to help’ by making it more expensive to hire staff.
Are you a business owner worried about the Budget? Get in touch: editor@thisismoney.co.uk
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