Business Owners Criticise Tax Hikes, Urge Chancellor Not to Hinder Growth

Entrepreneurs and family business owners have expressed grave concerns over the recent tax increases announced in the Budget, warning the government against undermining their passion for growth.

Criticisms focus on measures they believe will significantly impact their businesses, including increased employer National Insurance contributions, changes to inheritance tax on family-owned assets, and reduced capital gains tax reliefs.

Craig Bunting, co-founder of Bear Coffee, which employs 130 people across eight cafes in the Midlands, said the budget measures would have a “massive impact” on his business’s £5.5m revenue. It is estimated that the additional costs will amount to £200,000 a year due to the rise in employers’ National Insurance contributions from 13.8% to 15% from next April. The threshold at which employers start paying this tax will also be reduced from £9,100 to £5,000, affecting more part-time workers.

Ponting expressed his frustration, saying, “I don’t want to be taken advantage of just because I’m passionate enough to want to create something that has purpose, employs people and creates good jobs.” He stressed that the unexpected changes, particularly the inclusion of low-paid and part-time employees in National Insurance contributions, were a “malignant change” that could affect customer prices and prevent new business ventures.

Farmers have also protested in Westminster against making family farms liable for inheritance tax from April 2026. For decades, agricultural and commercial properties have been exempt to facilitate long-term ownership. Family business owners such as Stuart Paver, president of York-based footwear retailer Paver’s, have echoed these concerns. He said that imposing an inheritance tax on family businesses contradicts the government’s policy aimed at encouraging long-term investment and economic growth.

Beaver outlined the potential financial pressures on family businesses with £1m profits, highlighting how inheritance tax liabilities can eat up profits earmarked for reinvestment and shareholder returns over many years. “This makes it unreasonable to hold the shares and pass them on,” he added, noting that this could lead to more sales to private equity firms with short-term goals.

Nicky Walker, managing director of Walker’s Shortbread, took a more nuanced view but acknowledged the budget had led to a re-evaluation of their three-year investment plan. “While there was hype when the government announced that it would not increase taxes, you always thought it would happen. How else could the government raise money?,” he noted.

Walker noted that although the tax increases come after difficult years for businesses, certainty allows for better planning. However, he acknowledged that the actions could impact future investments and shareholder profits, which could lead to difficult conversations within family-run companies.

The National Living Wage is also set to rise by 6.7% to £12.21 next April, adding to financial pressures on businesses. Entrepreneurs are urging the government to reconsider these measures, warning that they could stifle growth, discourage investment and negatively impact employment.