More than half (52%) of business owners downgraded their expectations for business growth following last year’s Autumn Budget, with 48% pausing hiring and 34% reducing headcount.
That’s according to a survey by the Entrepreneurs Network which found that 88% of entrepreneurs are braced for higher taxes at this year’s Autumn Budget on 26 November.
Discussing more impacts of the 2024 speech, 62% of founders said they personally know at least one entrepreneur who either sold their business or left the UK in response to chancellor Rachel Reeves announcing the rate of Capital Gains Tax would increase from 18% to 24%, and reliefs like Business Asset Disposal Relief were made less generous.
Meanwhile, seven in 10 founders admitted to knowing at least one business owner who is currently planning to leave the UK due to either the current or expected future tax regime.
Only 1% of respondents think this year’s Autumn Budget will be good for entrepreneurs overall, compared to 82% who expect it to be bad.
When asked whether Reeves should stick to her promise not to raise rates of Income Tax, VAT or National Insurance Contributions, 45% said she should break it if it gets in the way of reducing the debt, necessary government spending or keeping other taxes low, while 44% said that she should stick to her promise even if it means increasing government debt, reducing spending or increasing other taxes.
Eamonn Ives, research director at the Entrepreneurs Network, said:
“Nobody likes paying tax, but most entrepreneurs have never regarded it as an enormous bugbear – until now. Our polling shows that years of repeated tax hikes are now taking their toll. The UK can’t hope to outcompete tax havens, but we can be smarter about how we raise money to fund public services.
“As entrepreneurs increasingly tell us, the focus should be on moving towards a more efficient, broad-based tax system which doesn’t discourage wealth creation at the margin. A thinner slice of a bigger pie should be Rachel Reeves’ number one objective when it comes to tax.”