Most UK businesses to ‘rethink their plans’ as tax rise takes toll

British Chambers of Commerce (BCC) has warned that 8 out of 10 companies in the United Kingdom will be forced to review their future strategies when the proposed increase in national insurance contributions to employers enter, making a “cost -cost barrel” for companies.

In a recent poll, 82 percent of BCC members said that the highest tax burden will lead to a reconsideration of their operating plans, while 58 percent expect a negative impact on employment and 54 percent expect their prices to walk. More than a third (36 percent) believe that the height will hinder the investment.

Chancellor Rachel Reeves announced in the October budget that the national insurance contributions to employers will rise by 1.2 percent to 15 percent of April, as well as reduce the annual salary threshold in which companies start paying national insurance, from 9100 pounds to 5,000 pounds. The ministers expect that these moves will be raised 25 billion pounds annually by the end of the contract.

Reeves defended this measure as “the right choice for taking”, and insisted that “successful companies depend on successful schools, health companies depend on the health NHS and the strong economy depends on strong public resources.”

However, companies ’leaders, especially those in low margin sectors such as retail and hospitality, criticized this rise, pointing to another cost on the top of reforms in workers’ rights and minimal wages. In a message to Reeves in November, more than 70 prominent retailers-including Tesco, Marks & Spencer, Sainsbury's, ASDA and Next-have been found that the increasing costs will inevitably lead to job losses.

BCC, which runs 51 rooms across the country, has often wiped about 1,300 companies from small companies (less than 250 employees), revealed that many companies are not satisfied with making the broader policies of the government. Poetry of approximately 80 percent that the effects of the new policy are not properly evaluated.

Alex Fitch, BCC's policy manager, said the survey indicates “sitting on a barrel of powder costs”. He pointed out that most companies “will have to raise prices and reconsider employment plans,” a position that he may undermine economic growth – a major governmental priority.

Veitch added that the government should “stop thinking” because of the continuation of the national insurance strategy throughout the duration of this parliament, and urged the “urgent” business price reform. It also raised concerns about the planned expansion in the legislation of work rights, saying: “Some proposals are completely incompatible with the reality of how companies work.”

Jonathan Reynolds, Minister of Business, met with corporate leaders in London this month, admitting that the last budget “has asked for a great deal of business.” He stressed, however, that these measures are necessary to restore public finances and finance infrastructure improvements, in his opinion, will enhance the competitiveness in the United Kingdom in the long term.

The ministers refer to the main obligations such as support for a third runway in Heathrow, infrastructure developments in the Oxford-Gamperbridge Corridor, and the launch of the National Wealth Fund as evidence that the government focuses on advancing growth.