UK Businesses Scramble Amid Tax Fears, Confidence at Lowest Level

The confidence of UK firms has hit a two-year low amid concerns over rising costs and taxes, according to the British Chambers of Commerce (BCC). The business group's survey of over 4,800 firms revealed that nearly two-thirds are worried about taxes following the recent Budget, which unveiled a rise in national insurance contributions (NICs) paid by firms from April.

The latest BCC survey found that only 21% of respondents expected sales to increase over the next year, with many fearing a sharp decline due to the increasing tax burden. Moreover, more than half - 55% - of firms predict they will raise prices in the coming months as they struggle to absorb the higher costs.

Labour's promise to deliver the highest sustained economic growth in the G7 group has also sparked concern among businesses, which warn that Budget measures such as the rise in employer NICs and National Living Wage could lead to job cuts and price hikes. The opposition party promises to boost productivity, reduce headcount, or hold off growing staff numbers.

BCC chief executive, Kevin McNamee, of Denroy Group, a manufacturer of plastic goods based near Belfast, echoed these sentiments. The combined impact of the changes to minimum wage and national insurance would cost his company "hundreds of thousands of pounds", making it essential to boost productivity or reduce headcount.

The BCC's survey data also revealed that confidence among UK firms had fallen sharply, with 63% worrying about tax - the highest level since the business group began recording the data in 2017. This trend underlines the growing concerns among businesses about the impact of taxes on their operations and competitiveness.