Business exodus caused by Budget policies
Will Drysdale, Senior Reporter, Business & Accountancy Daily
Almost four in 10 business owners have said they are looking to move their businesses abroad to avoid Rachel Reeves’s tax increases from the Budget
Impacts from the October Budget are beginning to show, and business owners and entrepreneurs are considering taking drastic steps to improve their prospects as they don’t believe the UK is as supportive to entrepreneurs as it should be.
Emma Queen, tax Partner at S&W commented: ‘We’re having more and more conversations with businesses looking at moving operations elsewhere. Whether it’s tax driven or access to funds, they’re asking if the UK is giving them what they need.
‘As the Chancellor works over the summer on plans for the next Budget, it is essential that she puts business owners at the heart of her thinking. We need to see policies that will encourage them to invest in growing and starting new businesses in the UK.’
Businesses have taken the brunt of plugging holes in public finances, such as the rise in national minimum wage, and the changes to employers’ National Insurance. As a result, almost half (48%) of businesses have said the changes made at the Autumn Budget has had a negative impact on their future.
42% of entrepreneurs are saying the changes are putting them off from starting their own business in the first place, while 47% that already have thriving businesses shared they are reluctant to grow their business further because of the government’s policies.
Additionally, further changes to the capital gains tax rates at the next Budget has the potential to deter 45% of entrepreneurs from starting their first business.
Toby Tallon, tax Partner at S&W added: ‘It’s extremely worrying that many business owners don’t consider the government to be supportive of entrepreneurs. Business owners are key to driving growth and they need to be given the confidence to make the long-term decisions that will create jobs.
‘The last Budget worsened the prospects for many business owners and there is a fear about what is to come in the autumn given the need to plug gaps in the Treasury’s spending commitments. Business owners are already feeling the heat from hikes in National Insurance costs which came into effect in April.’
As well as this, inheritance tax (IHT) is being changed for farmers and business owners from next year, which 43% said if the government decides to restrict IHT reliefs further it would make them consider leaving the UK all together.
Tallon added: ‘Changes to IHT, due to be introduced from next April, will make it more costly to pass businesses on to the next generation, which could force business owners to shelve plans for job creation, innovation and growth.’
