UK Businesses Report Record Tax Worries Post-Budget, Confidence Takes a Hit

08 Jan, 2025

Sixty-three per cent of businesses in the UK have raised concerns about taxation, marking a sharp increase from 48 per cent in Q3 and the highest level since 2017, as per the British Chambers of Commerce (BCC) Quarterly Economic Survey. Conducted after the autumn Budget, the survey highlights that concerns over inflation and interest rates remain consistent with the previous quarter. Confidence in turnover has dropped, with only 49 per cent of companies expecting growth in the next 12 months compared to 56 per cent in Q3, and retail businesses showing the lowest confidence at 39 per cent.

Tax concerns dominate across industries, particularly in production and manufacturing, where 72 per cent of firms identified it as a major issue. Inflation worries held steady at 47 per cent, while concerns over interest rates slightly decreased to 28 per cent. Profitability expectations have also declined, with only 40 per cent of firms predicting a rise compared to 48 per cent in Q3, and 32 per cent expecting a decline.

The survey indicates that 55 per cent of businesses anticipate raising prices in the next quarter, up from 39 per cent in Q3. Labour costs are a critical pressure for 75 per cent of firms, particularly in transport and logistics. Investment plans have been reduced by 24 per cent of businesses, up from 18 per cent, with retail, hospitality, and manufacturing sectors being the most affected.

Domestic sales have also declined, with only 32 per cent of respondents reporting increases, and retail and manufacturing firms facing the steepest drops. The rise in national insurance contributions (NIC) has added further strain, significantly impacting operational costs for many businesses.

The BCC emphasizes the urgent need for government support to address immediate business challenges, warning of continued declines in confidence and investment if current policies are not reassessed.

Related News

Interview