British businesses are being “taxed out of existence”, with the appetite to invest in major projects now at its weakest since the end of the Covid-19 pandemic, according to one of the UK’s largest business lobby groups.
The British Chambers of Commerce (BCC) said on Monday that the proportion of firms planning to increase investment slipped to 17 per cent over the past three months, down from 21 per cent in the previous quarter, according to its latest Quarterly Economic Survey, the UK’s largest independent poll of business sentiment.
The findings lay bare how tens of billions of pounds of tax rises on employers, combined with relentless increases in operating costs, have choked off the capital spending the UK economy has conspicuously lacked since the 2016 Brexit vote.
Since Labour won the 2024 general election, businesses have absorbed an additional £25 billion in national insurance contributions, a bill that has already overshot Treasury forecasts by some margin, alongside steep rises in the minimum wage that have pushed staffing costs sharply higher.
The frustration among owner-managers is palpable. One business owner told the BCC they were “being taxed out of existence”, while another said their firm was suffering “from higher taxation, increased labour and energy costs [that are] stifling growth and investment”. The sentiment echoes earlier BCC polling which found that most UK businesses were rethinking their plans as the tax rises took their toll.
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