Business leaders across Britain are issuing urgent warnings to Chancellor Rachel Reeves ahead of the Autumn Budget, cautioning that any increase in employment taxes could trigger higher consumer prices and stall economic recovery.
Survey Reveals Widespread Business Anxiety
New research from Employment Hero shows 86% of the 1,000 business leaders surveyed are deeply concerned about potential tax increases in the forthcoming Budget. This apprehension follows the recent rise in employer national insurance contributions from 13.8% to 15.05% that took effect on 6 April.
The survey reveals significant discontent with current government policy, with 59% of business leaders believing that the UK government overlooks the needs of small businesses when making Budget decisions.
Potential Consequences for Prices and Jobs
If employment costs rise further, nearly half of businesses (49%) indicated they would need to consider increasing prices, potentially adding further inflationary pressure to the economy.
The impact on employment could be equally severe, with over a third (33%) of leaders saying they would postpone hiring plans, while an additional 24% would consider making redundancies.
Kevin Fitzgerald, UK managing director at Employment Hero, emphasised the broader implications: "When you tax small businesses, you tax everyone. It creates a domino effect - higher costs lead to higher prices, fewer jobs, and less money in people's pockets."
Balancing Growth Against Fiscal Pressure
Despite these concerns, data from Employment Hero indicates some positive momentum in the labour market, with employment rising by 2.3% month-on-month in October and up 1.9% compared to the same period last year.
However, the effects of Reeves' inaugural Budget last year continue to worry businesses, with 72% of leaders stating that the announcement had directly impacted their firms.
Fitzgerald concluded with a clear message to the government: "The Autumn Budget is an opportunity to learn from past mistakes. If the government wants to continue this job growth and control inflation, they can't keep penalising the very businesses that power our economy."
Small and medium-sized enterprises have expressed particular concern about the combined impact of potential tax rises and the forthcoming Employment Rights Bill, fearing additional burdens at a time when many are already facing significant challenges.
