Businesses are braced for a battering this week as the Chancellor lines up a string of tax rises for firms in her Budget.
On November 25 last year, after her first Budget whacked up taxes on firms, Rachel Reeves told bosses at the Confederation of British Industry that she was ‘not coming back with more borrowing and more taxes’.
But firms look set to be squeezed again as the Chancellor struggles to fill a £30 billion hole in the nation’s finances.
Rises in the minimum wage and greater rights for workers have put employers, particularly in retail and hospitality, in a vice.
Now a raid on workplace pension contributions by capping tax-free salary sacrifice is set to push up costs further.
Companies that run large properties such as warehouses, shops and bars also stand to be hit with higher business rates.
Squeezed: Businesses are braced for a battering as the Chancellor lines up a string of tax rises for firms in her Budget
Gambling firms face a new betting tax and last week banks found themselves in the Chancellor’s crosshairs as she mulls a windfall tax on their profits.
Bosses have called for leniency from Reeves ahead of Wednesday’s expected tax barrage. Shevaun Haviland, head of the British Chambers of Commerce, said: ‘Another rise in the tax burden on firms is the wrong choice.’
She noted the rise in employer National Insurance Contributions in last year’s Budget had hit confidence when firms were dealing with other broadsides such as Donald Trump’s tariffs.
Call for leniency: Shevaun Haviland
‘Firms’ backs are against the wall,’ she said. ‘The answer to Reeves’ problem is to use the Budget to support them to grow.’
Emma McClarkin at the British Beer and Pub Association said a repeat of last year’s tax-raising would ‘bury’ the sector, adding: ‘Reeves has a choice – undo devastating and unsustainable tax burdens or oversee more job losses and closures.’
UKHospitality chair Kate Nicholls said the Budget would be ‘make or break’ for high streets, adding: ‘If the Government wants to get people back to work and revitalise high streets, it needs hospitality firing on all cylinders, not being taxed out.’
Others warned the tax burden was discouraging entrepreneurs from setting up businesses.
Jesse Wilson, head of beer brand Jubel, said: ‘The juice is not worth the squeeze any more.’
‘You run a huge risk starting a business and the potential rewards aren’t there. The cost of employing people is really hard. It feels like a never-ending loop.’
Family-owned firms called on the Chancellor to rethink capping inheritance tax relief on passing down firms. From April, there will be a £1 million limit on tax relief for business property.
Nick Showering, whose 180-year-old family cider mill in Somerset is behind brands such as Babycham, said: ‘Many families will have to sell or break up their companies often to the benefit of private equity or foreign buyers, who won’t face this tax.
Meanwhile Steve Hare, boss of FTSE 100 software giant Sage, told The Mail on Sunday businesses had voiced their frustrations to Prime Minister Keir Starmer about the incessant leaking of policy ideas, arguing ‘it creates uncertainty’.
He said: ‘If politicians need to do things that balance the books they must stick to those choices.’
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